Israeli Foreign Minister Avigdor Lieberman on Monday underplayed Egypt's decision to cancel a natural gas deal with Israel, a move that sparked new concerns here over the deepening rift between the two countries.

"I hope the dispute will be resolved like any business dispute. Israel is interested in upholding the peace treaty with Egypt, and the Egyptians share that interest," Lieberman told Israel Radio in a telephone interview from Azerbaijan.

"We're following what's happening in Egypt and hope that everything will work out for the best," he said.

The comments came a day after Egypt's national gas company EGAS announced the termination of a deal inked in 2005 between Israeli and Egyptian governments, in which the latter committed to supply 7 billion cubic meters (BCM) of gas to the Israeli market for 20 years.

Egyptian officials dismissed speculation that the abrogation of the deal was politically motivated and cited "violations of contractual agreements" presently being arbitrated abroad between Egyptian state-run corporations and private companies.

"Each side has rights and we are representing our rights," Mohammed Shoeb, head of the Egyptian Natural Gas Holding Company, told Egypt's Nile Television.

Israeli diplomatic sources, for their part, backed the Egyptian claim, saying that in talks they held with their Egyptian counterparts "it was made clear" that the cancellation of the deal, a linchpin of the Israel-Egypt peace treaty, was part of a commercial dispute.

"This has nothing to do with the diplomatic relations between Israel and Egypt," an unnamed diplomat told the Ha'aretz daily.

But some Israeli officials openly voiced concern over the Egyptian move as yet another sign of deteriorating relations between Cairo and Jerusalem.

Finance Minister Yuval Steinitz said he was "very worried both in political and in economic terms" about the termination of the gas deal, describing it as "a dangerous precedent" that threatens bilateral ties.

Opposition leader Shaul Mofaz went even further, accusing the Egyptians of "blatantly violating" the peace treaty and calling for the United States involvement in solving the dispute.

Israel's concerns over the future of the 1979 peace treaty with Egypt have risen since the ouster of former President Hosni Mubarak in a popular uprising early last year, with anti-Israel sentiments and inflammatory rhetoric on Cairo's streets running high.

Prior to the uprising, Egypt supplied some 40 percent of Israel 's natural gas, the country's main energy source. Egyptian critics of the deal charged that Israel enjoyed a bargain price for the gas and that cronies of Mubarak had pocketed millions of dollars from the profits.

Since Mubarak's ouster, the cross-border pipeline that runs from Egypt's Sinai Peninsula has been bombed by saboteurs at least 14 times, which saw electricity prices in Israel shoot up 20 percent and prompted Israel to explore alternative sources of supplies.