Israeli Defence Minister Ehud Barak visited Egypt to discuss Israeli allegations that Egypt was doing too little to prevent arms smuggling to the Islamist movement Hamas in the Gaza Strip.

Israeli Foreign Minister Tzipi Livni has accused Cairo of risking stability by not stopping arms and money from reaching Gaza, which Hamas seized from the rival Fatah party in June.

Egypt reacted by accusing Israel of encouraging support groups in the US to lobby members of the US Congress to the detriment of Egyptian interests.

Two US lawmakers on key congressional panels said in Jerusalem on Wednesday the US could make future aid to Egypt conditional on Cairo doing more to halt the smuggling.

Israel and Egypt have at times differed on how to handle the volatile territory, but Egypt has largely gone along with the US and Israeli policy of sealing off the Gaza Strip.

"Peace with Egypt is a strategic asset for both sides ... and, as in the past when there are disputes, they have to be worked out," Barak said before talks with President Hosni Mubarak in the Red Sea resort of Sharm el-Sheikh.

Livni said on Tuesday that Egypt's efforts to prevent arms smuggling into Gaza were "terrible" and risked strengthening Hamas over Fatah, which is backed by Western nations and Israel.

Egyptian Foreign Minister Ahmed Aboul Gheit replied: "Egypt is tackling all the violations which some people might try to carry out on the Egyptian-Palestinian border.

"The Israeli lobby in Congress has been pushing positions which Israel was behind," he said.Reuters