Egyptian police say they have seized 500 kilograms of explosives in the central Sinai Peninsula.
Authorities say the explosives were bound for Palestinians in the Gaza Strip.
The police say they found the explosives under plastic sheeting in the desert.
Over the past two years, Islamic extremists have carried out several terror attacks on southern Sinai beach resorts.
Israel claims that weapons and explosives are being smuggled from Egypt into the Gaza Strip.
The Israeli military has said it found underground tunnels between Egypt and the Gaza Strip that were used by weapons smugglers.
Israel and Palestinian factions in the Gaza Strip agreed on a ceasefire over one week ago.
Some information for this report was provided by AFP and Reuters.