CAIRO // The owner of a Sinai Peninsula holiday resort taken over by a group of armed Bedouin is refusing to pay the four million Egyptian pound (Dh2.4m) ransom the tribesmen are demanding.

Hesham Nessim, proprietor of the Aqua-Sun Resort 30km south of Egypt's border with Israel, says he will wait them out or retake his property with police help.

His brother Fouad says the Bedouin should expect a long stand-off. "It would be easier to go to the moon than to get that money from my brother," he told The National.

For all Mr Nessim's jolly confidence, however, the seizure of the resort in an area of Sinai popular with both Egyptian and Israeli tourists may be but a pinprick in a larger onslaught to come.

It underscores the security vacuum in the peninsula since the uprising that forced Hosni Mubarak from power last year - a void some fear could even spark the collapse of the 33-year-old Egypt-Israel peace treaty.

"The Sinai Peninsula has emerged as a new hot spot in the complex Arab-Israeli conflict, with an expanding terrorist infrastructure that makes it another front of potential confrontation," says Ehud Yaari, an Israeli journalist who wrote a report on Sinai for the Washington Institute for Near East Policy.

Outside the resort town of Sharm El Sheikh, the Sinai has never enjoyed much notice or benefit from Cairo. Until recently, the government would typically cast a concerned eye at the occasional peaceful protest or outbreak of violence there, and then lapse into its usual inattention, if not indifference.

Since Mubarak stepped down, however, a heightened air of lawlessness has swept the peninsula, with 10 attacks on a pipeline supplying natural gas to Israel and Jordan.

This week, armed men robbed a currency exchange bureau in Sharm El Sheikh, killing a French tourist who happened to be there. Bedouin tribesmen kidnapped 25 Chinese cement factory workers yesterday, demanding the release of fellow tribesman arrested between 2004 and 2006 for their roles in bombings at a resort at Taba on the coast of the Gulf of Aqaba.

Residents of Sinai say they have been neglected since Mubarak's departure and have attacked police stations and blocked access to towns, villages and industrial sites in protest.

Human-rights groups say scores of migrants trying to reach Israel, many of them Somali and Ethiopian, are being held for ransom in the lawless region.

"Sinai has become a major topic in security circles in the US," said Bruce Hoffman, director of the Centre for Peace and Security Studies at Georgetown University's Walsh School of Foreign Service.

"The security gap that has opened up could have a significant impact on regional security."

Mr Nessim said the situation from Dahab to Sharm El Sheikh, along the Red Sea, is far from secure. He described roaming bands of Bedouin armed with AK-47s and other weapons terrorising hoteliers along the coast. The police who abandoned their posts during the uprising against Mubarak a year ago have only recently resumed patrolling.

"There are many good Bedouin, but there are a minority that are doing bad things," he said. "Now our country is not focusing on problems for some investors like us. We don't even have a government yet."

The seizure of Aqua-Sun was not the first instance of trouble at the resort, a collection of bungalows resting along a long stretch of Red Sea beachfront. The air-conditioning system was stolen last October and there had been earlier threats, according to a family friend.

Underlying the armed takeover of the resort is a long-running, peninsula-wide dispute over the suspected illicit appropriation of Bedouin land by Cairo's rich and powerful.

Bedouin in the area say the land on which Aqua-Sun was built belongs to them, and was taken over illegally by the government and sold to Mr Nessim. The ransom demand represents their estimate of the value of the property.
The Bedouin attacks on hotels and the pipeline blasts are just two examples of Sinai's deteriorating security, says Geoffrey Aronson, director of research at the Foundation for Middle East Peace in Washington, DC.

"We are quickly approaching the point, if we have not already, where the security vacuum and the retreat of critical elements of government authority will pose a direct economic threat to Egypt and a security problem of increasing severity to Egypt and its neighbours," he said.

Sinai's security problems are rooted in a combination of decades of neglect by the Egyptian government and its sensitive location.

Mubarak's regime saw Sinai Bedouin as potentially disloyal Egyptians because they lived under Israel's occupation of the peninsula from 1967 to 1982. During his 30 years in power, he made little effort to invest in improving their lives.

Instead, South Sinai in particular underwent a massive property boom starting in 1987, with powerful businessmen such as Hussein Salem, an advisor to Mubarak who built several large resorts, reaping the benefits.

Mr Salem is being investigated for corruption in relation to his role in setting up the natural gas deal with Israel, but he fled to Spain after the revolution and is being tried in absentia.

The Nessim family appear to have been beneficiaries of the regime's largesse.

Any attempt by Egyptian security forces to restore security to the Sinai is made difficult by treaty agreements between Israel and Cairo. The Camp David Accords set a limit to the number of security forced Egypt could deploy to the Sinai Peninsula. Different zones are demilitarised to different degrees, especially within 20-40km of the Israeli border. Israel also agreed to limit its forces 3km from the border.

The other complicating factor is Sinai's small border with the Gaza Strip, which is controlled by Egypt and Israel but undermined by a network of illegal tunnels that allow smuggling of people and supplies on a daily basis. Some security analysts have surmised that Gaza-based militants, working with groups of Bedouin or Islamist extremists in Sinai, were responsible for the pipeline bombings last year.

Mr Yaari, the Israeli journalist who is also a fellow at the Washington Institute for Near East Policy, urges immediate action.

"Measures are needed to prevent the total collapse of security in and around the peninsula, avoid the rise of an armed, runaway Bedouin statelet, and minimise the risk of Israeli-Egyptian peace imploding under the pressures of the wild Sinai frontier," he says

For Fouad Nessim, such assessments are exaggerations, and the capture of Aqua-Sun was the consequence of a temporary security lapse that came after Mubarak's resignation.

"It's like catching a cold," he said. "Everything will be fine. But other countries near by don't want us to be OK. They are celebrating these problems because they don't want us to stand up by ourselves."