The turbulent Sinai Peninsula has become the biggest challenge for Egypt’s new Islamist government, a report said.

Israel’s Institute for National Security Studies asserted that the collapse of order in Sinai was seen as the greatest security challenge for Egypt. In a report, the institute said the Egyptian elite expects increased tension in Sinai as well as with neighboring Israel.

“There is awareness that Israel is not interested in escalation, and is therefore strengthening its defenses,” the report, titled “Egyptian Discourse on the Social Networks,” said. “According to the network discourse, however, escalation seems almost certain, given the Egyptian military’s inability to control Sinai and contain the extremist elements, and because there is no long range strategic plan for solving these problems in Sinai.”

Authors Udi Dekel and Orit Perlov said Sinai topped the leading five issues being debated in Egypt. The two researchers tracked both the Egyptian state media as well as the Internet to determine concerns of the elite.

“According to the discussion, the greatest security challenge currently facing Egypt is the spread of terrorism and crime in Sinai due to ineffective governance and the lack of integration of the Bedouin tribes in the greater Egyptian society,” the report said. “The Sinai problem has intensified, due to the neglect of the Bedouin tribes over many years, the declining volume of tourism, rampant unemployment, and the burgeoning crime rate — human trafficking, growing, trading, and smuggling illegal drugs, weapons smuggling, smuggling of goods to Gaza, and kidnapping of Western hostages for the purpose of freeing prisoners.”

The report said Egyptians were aware of the Islamist takeover of Sinai, including the growing presence of Al Qaida. Egyptian network users were said to be concerned over an escalation with Israel that could result in war.

“People are worried that extremists will spark an escalation against Israel through terrorist activity or surface-to-surface missile fire from Sinai, leading to an Israeli military response and ensuing hostilities that run counter to current Egyptian interests,” the report said.

Egyptians were said to support cooperation with the Hamas regime in the Gaza Strip to maintain stability in Sinai. Some envision eventual Egyptian annexation of the Gaza Strip.

Egyptians have supported changes to the 1979 treaty with Israel that would end the demilitarization of Sinai. Many on the social network asserted that Egyptian President Mohammed Morsi would review the treaty in an attempt to win grassroots support and embarrass the military council.

“The prevailing view is that confrontation between Israel and Egypt is almost unavoidable,” the report said, “even though neither party wishes it, both because of the expected change in Egyptian policy towards Hamas and as a result of Egyptian helplessness in dealing with the challenges of government, terrorism, and crime in Sinai, as well as the current paralysis in the peace process between Israel and the Palestinians, where there is currently ‘no peace, no resistance and no war.'”