For more than two years, a policy of mutual deterrence has prevailed between Israel and Hamas along the Gaza Strip border.

But Thursday’s militant attacks that killed eight Israelis and Israel's retaliatory air strikes on Gaza highlight a wild card that could destabilize the already precarious region.

Weakening Egyptian authority in the sparsely populated Sinai peninsula, which shares a long porous border with southern Israel, offers militants a new route of attack. That creates dilemmas for both Israel and Hamas, neither of which is looking for a major conflict now, say analysts.

"This attack was more than Hamas wanted," says Hillel Frisch, a political science professor at Bar Ilan University.

But both Hamas and Israel are but constrained in their ability to deter violence in the Sinai. Unlike attacks launched from Gaza – a small, densely populated territory run by Hamas – attacks launched from the Sinai are potentially harder to trace to a specific group, and thus harder to assign ultimate responsibility for.

"Israel has always wanted to deliver the same message that militant groups in Gaza can be harmed," says Talal Okal, a Gaza-based political analyst. "Now the deterrence challenge has changed. The militants from Gaza can start attacks miles away from Gaza."

Sinai security vacuum?

On Thursday, militants launched a series of attacks on Israeli vehicles near the Sinai-Israel border, not far from the southern resort city of Eilat. Eight Israelis were killed, including one soldier and a policeman. While no group took responsibility, many Israelis blamed Hamas for at least an indirect role in fostering militants who then traveled from Gaza through the Sinai to attack Israel's southern border.

"Hamas once again wants to remind the world that it can ignite violence whenever and wherever it wants," Mr. Okal says. "It has used the lawlessness and the absence of security in the Sinai to build up and train militant groups that can reach Israel easily since the borders with Gaza are heavily fortified."

Officials and analysts in both Israel and Gaza blamed the attacks on a weakening of Egyptian security in the wake of the revolution that ousted former President Hosni Mubarak in February.

"Since the collapse of the Mubarak regime, the Sinai Peninsula is suffering from a security vacuum," says Mkhaimar Abusada, a political science professor at Gaza’s Al Azhar University.

In the wake of Egypt's revolution, Sinai could become a lawless Arab-Israeli flash point like southern Lebanon in the 1980s, says Professor Frisch of Bar Ilan University. That would give the Islamist militant Hamas rulers in Gaza reach beyond their border by allowing militants to travel into Sinai through the underground tunnels along the Gaza-Sinai border.

Hamas seen as being caught off guard

Hamas has said that its policy is to fight Israel from within the borders of the Palestinian Territories. Israeli press, however, said that the Israeli intelligence agency Shin Bet traced the attacks to the Hamas-backed militia, the Popular Resistance Committees (PRC), which has launched several high-profile attacks in past years, including the kidnapping of Gilad Shalit in 2006.

The Israeli military said it targeted weapons-manufacturing centers in Gaza, but refrained from targeting Hamas militants. However, the killing of two senior PRC members was touted by Israeli Prime Minister Benjamin Netanyahu as swift justice. Today, Gaza launched missile attacks on cities in southern Israel.

Israeli commentators who accepted the governments’ accusations against the PRC speculated that Hamas was caught off guard by the attack.

Gaza militants are suspected of developing an extensive network of ties to Bedouin smugglers and Islamist groups abroad. With the decline in Egyptian control at the Gaza-Sinai border, Hamas may have to exert more control over militant traffic through the tunnels connecting Egypt to Gaza if it doesn’t want to be surprised again.

Although Israeli leaders on Thursday evening promised a stiff response against Gaza, they were more circumspect in their comments about the deterioration of Egyptian control in Gaza. Valuing its continued security cooperation with Egypt, Israel is likely to focus on accelerating work on a new border fence and behind the scenes collaboration, rather than publicly confront Cairo with its security concerns.

"The question is what to do beyond this, whether the IDF forces stationed on the Egyptian border should be significantly reinforced, whether headquarters should be reestablished, whether the intelligence system should be refreshed," wrote Nahum Barnea, a commentator for the Israeli newspaper Yediot Ahronot. "In other words, should the situation on the ground be returned to what it was prior to the signing of the peace agreement with Egypt."

In a sign of the potential for tension, Egypt's state-run news agency accused the Israeli army of killing two Egyptian soldiers in the crossfire with the militants. There has been no official comment from the Egyptian government on whether the attacks originated in Egypt.

Gazans brace for war, stocking food and fuel

A large-scale offensive against Gaza now, as Israel is mounting a defense against an expected United Nations vote on Palestinian statehood in September, could be counterproductive for Israel.

"If Israel continues to hit Al Qassam training centers and government offices, that will build pressure on Hamas to respond, to retaliate," says Professor Abusada at Al Azhar University. "If there is no intervention of a third party, it will deteriorate and get out of control."

Meanwhile, Palestinians in Gaza are talking of a new war on the coastal strip in light of Israel's stepped-up military activities against the Hamas-ruled territory. Abdul Qader Kojuk, a construction worker from Gaza, says residents are stocking up on food and fuel.

"Most of us are very afraid. It's apparent that no groups from Gaza claimed responsibility for the attack, but I think Palestinians are engaged to these attacks in a way or another," he says. "The response from Gaza groups with firing rockets on Israeli targets and pledging to retaliate the death of the leaders killed yesterday by Israel proves that the round of violence is going to widen. I think it's only the tip of the iceberg."