Last week’s terrorist attacks have forced Egypt and the United States to cancel annual military drills as a senior American official arrives in Cairo to try to calm tensions with Israel.

The annual joint military exercises were canceled due to the “ongoing transitional events” in Egypt following the deaths of five Egyptian policemen and soldiers when Israel chased after the Al Qaeda-linked terrorists who killed eight Israelis and wounded 30 others north of Eilat.

The Bright Star army drills were to begin later this year. The U.S. State Department said that, “The decision was reached as part of our routine bilateral conversations. Egypt and the United States also agreed to commence formal planning in June 2012 for the next installment of exercise Bright Star in 2013.”

The terrorists infiltrated from the Sinai, which is supposed to patrolled by Egypt, and at least one of the multi-pronged attacks was carried out under the noses of Egyptian soldiers sitting in a watchtower adjacent to the border fence along an Israeli highway.

The deaths of the Egyptian soldiers fueled further anger against Israel among Egyptians, who stormed the Israeli embassy Saturday night and tore down and burned the Israeli flag. They succeeded in placing an Egyptian flag on the embassy building as Egyptian security forces looked on without intervening. The person who scaled the building to replace the flag was hailed as a hero.

U.S. Assistant Secretary of State Jeffrey Feltman arrived in Cairo Sunday but denied that the Obama administration is interfering in Egypt’s internal affairs. He said American interests are limited to maintaining democracy.

Concerned with the provisional military regime and the influence of the Muslim Brotherhood, the United States allegedly has been funding new political parties to influence the next elections in Egypt, where anti-American anger has paralleled an increasingly anti-Israeli military regime.

Feltman is expected to try to ease tensions between Israel and Egypt following last week’s terrorist attacks. Cairo has asserted that Israel’s apology for the deaths of Egyptians forces is not enough, but it has not stated what it expects.

"Egyptian blood is not cheap and the government will not accept that Egyptian blood gets shed for nothing," state news agency MENA quoted a cabinet statement as saying.

The cabinet demanded that the regime expel Israel’s ambassador to Cairo amid other calls for cancelling the 1979 peace treaty with Israel. Professor Moshe Maoz, an expert on Egypt interviewed by Arutz Sheva feels that Egypt will realize that these moves are self-defeating.

President Shimon Peres, during a condolence visit to families of two Israeli soldiers killed by terrorists last week, said, "The peace with Egypt is strategic.  Both we and the Egyptians have a supreme interest in preventing terrorism from running amok. The Sinai must remain a center of tourism and peace.”