One proposal is to construct a huge moat along the 14-kilometer Egypt-Gaza border. Officials said the moat would be built in stages, with the first portion to be located in the area of the arms smuggling tunnels along the divided city of Rafah.

Officials said the military believes that at least 30 arms smuggling tunnels connect Sinai to the Gaza Strip. They said Egypt, despite the deployment of 750 police commandos, has not made a dent in the smuggling.

In 2004, the Defense Ministry sought to promote the construction of a moat. The ministry issued a tender for digging a four-kilometer-long canal, with a width of 100 meters and depth of 25 meters.

At the time, Egypt opposed such a project. But the Foreign Ministry has renewed discussions with the regime of Egyptian President Hosni Mubarak.

"Any arrangement will have to provide an answer to the problem of the arms buildup," Israeli Foreign Minister Tzipi Livni said.