On the orders of President Mohammed Morsi, Egypt's spy chief and the governor of an area that saw 16 soldiers killed over the weekend have been sacked. This comes as Egypt launched raids in Sinai in retaliation.
A spokesman said on state television that Morsi had ordered national intelligence chief Murad Muwafi to retire on Wednesday. The governor of North Sinai, Abdel Wahab Mabruk, received the same order.
Egypt launched a retaliatory attack on Tuesday aimed at Islamist militants suspected of carrying out the attack against the soldiers. By Wednesday, the military had claimed success.
"Elements from the armed forces and interior ministry supported by the air force began a plan to restore security by pursuing and targeting armed terrorist elements in Sinai, and it has accomplished this task with complete success," the military said in a statement.
At least 20 suspected militants have been killed.
Border tensions rising
The Egyptian government blamed Sunday's ambush on Palestinian Islamist militants. Cairo indefinitely closed the Rafah border crossing with the Gaza Strip in response. Gaza is controlled by the Islamist group Hamas.
There has been growing concern about security along the border since Egypt's formerly US-backed President Hosni Mubarak was ousted in 2011. Lawlessness has been on the rise in the Sinai Peninsula, and the Middle East News Agency reports that one checkpoint has been targeted 28 times since the Egyptian revolution began.
Morsi is a member of the Islamist Muslim Brotherhood, which is more supportive of the Palestinians and openly critical of Israel than the former Mubarak regime. Morsi has promised to respect all of Cairo's international agreements, which would include Egypt's 1979 peace treaty with the Jewish State.
But other members of the Muslim Brotherhood have called the treaty into question, raising concern that one of the Middle East's former anchors of stability could be weakened. Mubarak's Egypt was often a lead negotiator brokering talks between Israelis and Palestinians.
slk,mz/msh (Reuters, AFP, dpa)