The decision comes as Egypt seeks to chart a new foreign policy course, in the wake of the uprising that saw the overthrow of Hosni Mubarak, that could strain its warm relationship with the United States and its ties with Israel.
Israeli officials have already expressed dismay over Egypt’s decision to restore full democratic relations with Iran for the first time since the revolution that overthrew the Shah in 1979.
The unease has grown after an opinion poll released earlier this month showed that 53 per cent of Egyptians supported the annulment of the country’s peace treaty with Israel, seen as vital linchpin of stability in the Middle East.
“We are troubled by the developments in Egypt, by the voices calling to annul the peace treaty, by the rapprochement between Egypt and Iran and by the upgrading of relations between Egypt and Hamas,” an Israeli government official told reporters.
“These developments potentially have strategic implications for Israel’s national security.”
Under the supervision of Mr Mubarak, the ousted president, Egypt participated willingly in the controversial blockade of Gaza, which has been under full Hamas control since 2007, by closing the territory’s southern border crossing at Rafah.
Mr Mubarak had little affection for Hamas, an offshoot of Egypt’s Muslim Brotherhood, which the former president outlawed and suppressed while in power.
But since the revolution that toppled Mr Mubarak, the Muslim Brotherhood has been allowed to operate once more and the transitional military government has come under pressure the popular mood in Egypt, which is broadly sympathetic to Palestinian aspirations.
Egypt’s foreign minister, Nabil al-Arabi, said the blockade on Gaza had to be lifted in order to alleviate the “suffering of the Palestinian nation.”
Israel’s blockade of Gaza, which was partially eased last year, has been widely criticised for imposing what has been seen as “collective punishment” on its 1.5 million residents. David Cameron, the prime minister, last year described the territory as a “prison camp”.
By opening the border, however, Hamas will find it easier to transport rockets into Gaza which will then be turned on Israeli towns and cities, officials in Israel said.
Both Britain and the US have designated Hamas as a terrorist group.
One Israeli official said: “In the past, Hamas was able to rearm when Egypt was making efforts to prevent that. How much more can they build their terrorist machine in Gaza if Egypt were to stop?”
Despite its determination to become more independently assertive, Egyptian officials said they were determined to preserve the country’s peace treaty with Israel and steer a midway course between regional and western interests.
The decision to restore relations with Iran and to exchange ambassadors, they said, brought Egypt into line with its neighbours but did not mean that Tehran and Cairo were now “friends”.
“All the world has diplomatic relations with Iran with the exception of the United States and Israel,” Menha Bakhoun, a spokesman for the Egyptian foreign ministry, was quoted as saying.
“We look to Iran as a neighbour in the region that we should have normal relations with. Iran is not perceived as an enemy as it was under the previous regime, and it is not perceived as a friend.”
It comes after Fatah, the party of the Palestinian leader Mahmoud Abbas, and Hamas announced a reconciliation after four years, following a meeting in Cairo.
In another move that will be seen as incendiary to Egypt, leaders of both parties have been invited to sign the unity agreement in Cairo on Wednesday.
Meanwhile an Egyptian soldier of the border guard unit was killed after exchanging gunfire with tunnel smugglers near the Gaza border.
The soldier was shot in the chest late Thursday night after spotting the smugglers near the Salah al-Din gate in the border town of Rafah, the officials said, adding the smugglers fled after opening fire.
The incident occurred hours before the border announcement.