Egypt has called on Israel to do more to ease restrictions on the movement of Palestinians.
The comment comes after talks between the Israeli Prime Minister and the Egyptian President in Cairo.
Egypt has also warned that the expansion of Jewish settlements has to stop if the peace process is to move forward.
Yesterday Benjamin Netanyahu announced plans to build nearly 700 new Jewish homes in disputed parts of East Jerusalem.
The move has been strongly criticised by the Palestinians and the US, with warnings it could undermine peace talks.
Egypt is also helping to mediate a possible prisoner exchange between Israel and the Islamist group Hamas.
Under the deal, if agreed, Hamas would hand over the captured Israeli soldier Gilad Shalit and Israel would free some 1,000 Palestinian prisoners.