Obama bypasses Congress to give Egypt $1.5 billion in aid, Egypt unilaterally cancels gas deal with Israel

JERUSALEM (Reuters) - Egyptian energy companies, citing a trade dispute, have terminated a deal to supply Israel with natural gas in a step that may further erode bilateral ties strained by a popular revolt that toppled Egypt's pro-Israeli leader last year.

An Israeli partner in the business made the step public on Sunday but an Egyptian firm said the decision to cancel the deal had been made on Thursday.

Israel, which relies on Egypt for 40 percent of its natural gas supply, worried about facing further energy cuts after a series of sabotage attacks on the pipeline running through the volatile Sinai peninsula contributed to shortages.

Israeli Finance Minister Yuval Steinitz expressed "great concern" about the suspension, saying it had set "a dangerous precedent which casts a shadow on the peace agreements and the peaceful atmosphere between Egypt and Israel".

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