UPDATE 1-Israel to OK thousands of Egyptian troops in Sinai-report
* Israel-Egypt peace accords call for a demilitarized Sinai
* Israel worried Cairo loosing grip on Sinai (Adds Egyptian comments, paras 8-9)
By Maayan Lubell
JERUSALEM, Aug 26 (Reuters) - Israeli Defence Minister Ehud Barak will agree to let Egypt deploy thousands of troops in the Sinai to tighten security after a deadly border attack by gunmen that strained relations between the two countries, the Economist reported on Friday.
Their 1979 peace treaty allows only a small presence of lightly armed Egyptian border guards in a demilitarized Sinai and also curbs Israeli deployment on its side of the frontier.
The Economist reported that Barak said Israel would also allow Egyptian helicopters and armoured vehicles into Sinai but no tanks other than one battalion already stationed there.
Officials in the Israeli defence ministry and prime minister's office declined comment on the report by the London-based weekly news magazine.
The killing last week of eight Israelis near the southern seaside resort of Eilat by militants whom Israel said infiltrated from the Gaza Strip via the Sinai stoked Israeli fears of Cairo losing its grip on the sprawling desert peninsula since the toppling of Hosni Mubarak in February.
With Israel's agreement to temporary reinforcements, Egypt had already beefed up its forces in the Sinai and had been waging an offensive against militants in the area before the cross-border assault. Continued...