Gen. Aharon Ze'evi-Farkash told the Cabinet ministers at their weekly meeting on Sunday that a gang of the international terrorist organization Al-Qaeda recently took over a large area in the Sinai Peninsula. After banishing the residents, they placed mines around their new base - signaling Egyptian police and army forces not to come near.

Activities at the base include the training of terrorists and preparations for sending them to Gaza, from where they can more easily enter Israel to perpetrate attacks.

Almost a month ago, Mahmoud A-Zahar, regional head of Hamas, told the Italian newspaper "Corriere de La Sierra" that several Al-Qaeda terrorists had already crossed into Gaza.

Ze'evi-Farkash said that in the days and weeks following Israel's unilateral withdrawal from Gaza, Al-Qaeda sent large amounts of weapons and many terrorists into Gaza, with the purpose of strengthening the terrorist infrastructure there. Among the weapons smuggled in are shoulder-launched missiles, long-range Katyusha rockets, and tremendous amounts of automatic rifles and bullets. It is even reported that a new Kassam rocket has been introduced into the Gaza arsenal, one that explodes in mid-air, releasing lethal falling shrapnel even if it misses its essential target.

The Intelligence Chief said that Egypt is refraining from taking action against the new terrorists. He said Egypt fears that a direct clash with Al-Qaeda will lead to terror attacks against Egypt itself. Other reports are that Egypt cannot take massive military action in the demilitarized desert without Israeli permission - something it does not wish to request.

Farkash's report jibes with other accounts. A recent article in The Jordan Times cites reports to the effect that Al-Qaeda has set up makeshift camps in Sinai's rough terrain and inaccessible peaks just as it did in Afghanistan's Tora Bora mountains. Debkafile, which reported on Al-Qaeda's presence in Sinai a week ago, said that Egyptian forces basically control only the perimeter of Sinai, while up to half of the interior is exclusively Al-Qaeda-land.

The Anti-Terrorism Task Force, under the auspices of the Prime Minister's Office, has not withdrawn its warning against travel to Sinai, issued in light of "specific and well-based intelligence" indicating plans to kidnap vacationing Israelis there.

Gen. Ze'evi-Farkash told the Jaffe Center for Strategic Studies last week that Al-Qaeda terrorists had entered Gaza from Egypt following Israel's withdrawal, though he did not emphasize their presence in the Sinai. The general also said that during the ten days after the withdrawal, Palestinian terrorist groups brought in 3,000 AK-47 assault rifles, 300 rocket-propelled grenades, 1.5 million rounds of ammunition and an undetermined number of anti-tank rockets and surface-to-air missiles from Sinai.