CAIRO (Reuters) ? Egypt and Israel sought on Sunday to defuse a diplomatic crisis over the killing of five Egyptian security personnel during an Israeli operation against cross-border raiders, but crowds of Egyptians protested angrily at the Israeli embassy in Cairo.
One demonstrator scaled several floors of the high-rise embassy building overnight to tear down the Israeli flag and replace it with an Egyptian one.
Ahmad al-Shahat quickly shot to fame on Twitter under the name "Flagman," while newspapers and one would-be Egyptian leader feted him as a hero.
"Hamdeen Sabahy, the Egyptian presidential candidate, sends a salute of pride to Ahmad al-Shahat, the public hero who burned the Zionist flag that spoiled the Egyptian air for 30 years," Sabahi said in statement.
The crisis began when five Egyptian security personnel died as Israeli forces pursued a Palestinian faction who killed eight people in southern Israel on Thursday. Israel said the group entered Israel from the Gaza Strip via Egypt's Sinai desert.
Several hundred protesters remained in front of the Israeli embassy near the Nile waterfront on Sunday, watched over by hundreds of troops and police. Some said they would stay until Israel's ambassador was ejected from Egypt.
A protest of any size near the Israeli embassy would have been quickly smothered by state security in the era of Egypt's former President Hosni Mubarak.
The Cairo-based Arab League condemned "the Israeli attack on the Egyptian forces" in a statement and said Israel bore "full responsibility for this crime."
However, there were signs that Egypt and Israel were both trying to ease the gravest crisis in their relations since longtime ruler Mubarak's overthrow in February.
Egypt said on Saturday it would recall its ambassador from Israel after the killings, but it was unclear whether the withdrawal was going ahead.
Israeli Defense Minister Ehud Barak said Israel regretted the deaths and told the army to conduct an investigation with Egypt, which responded with cautious approval.
A delegation led by an unidentified high-ranking Israeli envoy arrived in Cairo on a private plane from Tel Aviv on Sunday to a low-key reception, airport sources said.
U.S. OFFICIAL ARRIVES IN CAIRO
Assistant Secretary of State Jeffrey Feltman arrived in Cairo on Sunday evening to meet with Egyptian officials, according to a source at the American embassy in Cairo.
The UN Special Coordinator for the Middle East Peace Process Robert Serry also visited Egypt on Sunday and held talks with government officials including foreign minister Mohamed Kamel Amr, Chief of Intelligence Murad Muwafi and the Arab League Secretary-General Nabil Elaraby, a UN press release said.
"The special coordinator conveyed to the government of Egypt his deep concern over the death of Egyptian security personnel," the statement said, adding that Serry was worried about "the continuing tensions, in particular the escalation of violence in Gaza and southern Israel."
The head of Egypt's ruling military council, Field Marshal Mohamed Hussein Tantawi, met with ministers in a crisis management committee on Sunday to discuss the events in Sinai, state media said.
Barak said: "We highly appreciate the responsibility the Egyptian government is showing (regarding) the peace agreement and I expressed directly the Israeli regret at the loss of life of Egyptian security people during the incident."
The spat has highlighted the dilemma faced by the generals ruling Egypt, caught between pressure to preserve the 1979 peace treaty with Israel and popular hostility to the Jewish state.
The army is trying to keep a lid on social tensions as Egypt prepares for elections later in the year as part of a promised transition to democratic civilian rule after Mubarak's removal.
Egypt's condemnation of Israel in a statement after a second cabinet crisis meeting on Saturday was unusually blunt.
"Egyptian blood is not cheap and the government will not accept that Egyptian blood gets shed for nothing," state news agency MENA quoted a cabinet statement as saying.
MORE ROCKET FIRE FROM GAZA
The Israeli military killed the leadership of the faction it said was responsible for last week's attack in an air strike in Gaza on Thursday and launched more than a dozen more raids on Friday. Medical officials say at least 15 Palestinians were killed, including five civilians, three of them children.
Arab League Secretary-General Nabil Elaraby called the Israeli air attacks on Gaza a "war crime."
"We ask the Security Council to ... quickly take all necessary procedures to stop the offensive on the Gaza Strip," the Cairo-based League said in a statement.
Israel said it was acting in self-defense and did not rule out further action to prevent the launch of rockets and missiles against Israeli cities.
Palestinian militants fired at least 50 rockets at Israel from the Gaza Strip on Saturday, killing an Israeli man and wounding at least seven other people.
Militants fired a dozen more rockets from Gaza toward Israel on Sunday. At least two landed in the Egyptian border town of Rafah, apparently in error, but did not explode and no one was hurt, an Egyptian security source said.
Sources in Hamas, the Islamist movement that controls Gaza, said Israel arrested 120 of its activists and supporters in the West Bank city of Hebron on Sunday. The Israeli military spokesman has declined comment.
A senior Hamas official in Gaza told Reuters militant factions "are ready to halt fire, but Israel has to agree."
The U.N. is due to publish the results of an investigation into Israel's seizure of a Gaza-bound ship last year in which nine Turks died, leading Turkey to demand an apology and compensation from Israel.
Israel has said it would pay into a fund for those bereaved or hurt aboard the ship, but it has refused to apologize.
"Israel should not think that the Palmer report will be published and the present stalled state of relations will continue as they are... They will get worse," Turkish Anatolian news agency quoted Foreign Minister Ahmet Davutoglu as saying.
(Additional reporting by Ali Abdelatti, Amr Dalsh, Omar Fahmy and Ayman Samir in Cairo and Ori Lewis and Allyn Fisher-Ilan in Jerusalem; Writing by Tom Pfeiffer; Editing by Jon Hemming and Jan Harvey)
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