Jerusalem: Israel's leaders anxiously watched events in Egypt on Sunday as analysts warned that if a new leadership was dominated by Islamists it could threaten 30 years of peace between the two neighbours.

As the wave of unprecedented protests continued to engulf Egypt, Israeli officials have been nervously eyeing the developments and assessing the likely impact on ties with the Jewish state.

"We are attentively following what is going on in Egypt and in our region," Israeli premier Benjamin Netanyahu said on Sunday after holding late-night talks with US President Barack Obama and Secretary of State Hilary Clinton.

"Peace between Israel and Egypt has existed for more than three decades and our aim is to ensure that these relations continue to exist," he said.

Israel's two top-selling dailies ran the same banner headline on their front pages, proclaiming 'A New Middle East' and raising the spectre of Islamic fundamentalists filling the political vacuum left by the expected end of Egyptian President Hosni Mubarak's autocratic rule.

"In this kind of chaotic situation, the advantage of groups like the Muslim Brotherhood is that they are the most organised and also the most resolute," said Benjamin Miller, a Haifa University expert on Middle East conflicts and security.

Even though Muslim Brotherhood activists had not so far been prominent in the demonstrations, the group had the clear advantage of having a widespread political infrastructure already in place, he said.

Israel, which is already facing hostile Islamic groups in Lebanon and the Gaza Strip, is deeply concerned at the prospect of an Islamic ascendancy in Egypt, which which it shares its longest border.

Writing in the top-selling daily Yedioth Aharonot, Eli Shaked, a former Israeli ambassador to Cairo, said that if free elections were held the outcome would be inevitable.

"The assumption at present is that Mubarak's regime is living on borrowed time, and that a transition government will be formed ... until new general elections are held," he wrote.

"The most likely result will be that the Muslim Brotherhood will win a majority and will be the dominant force in the next government.

"That is why it is only a question of a brief period of time before Israel's peace with Egypt pays the price."

Egypt became the first Arab nation to make peace with Israel in 1979, having fought three costly wars with the Jewish state since it was founded in 1948, but relations remain largely cool.

In 1994 Jordan became the second and so far the last Arab state to make formal peace with Israel.

"If the Muslim Brotherhood is going to win and become the dominant group, obviously there will be a major deterioration in Egyptian-Israeli relations," Miller said.

"It doesn't mean that there will be a war immediately or in the foreseeable future - even the Muslim Brotherhood shares some interests in avoiding war," he added.

"But all this pro-Western, anti-Iranian coalition of Saudi Arabia, Egypt, Jordan and Israel will be undermined."

However, Yoram Meital, head of the Centre for Middle East Studies at Ben Gurion University in southern Israel, told AFP that a victory for the Muslim Brotherhood should not be seen as a foregone conclusion.

While they dominated the opposition under Mubarak's draconian regime, a more open political system could engender a different kind of politics, he said.

"What I read is that within a very short time we will get a different political context," he said.

"In this context, other sectors - including the silent majority of the Egyptian people - would play a significant role."

Meital suggested there could be a future alliance between the Brotherhood and Mohamed ElBaradei, the Nobel laureate and former UN chief nuclear inspector who has emerged as a dissident leader in his homeland.

"At this point he's the most distinguished among the opposition," he said, pointing out that ElBaradei had attracted considerable attention in the international and Arab media.

"It's also very interesting that Dr. ElBaradei initiated a dialogue, a very constructive one, with the leadership of the Muslim Brotherhood in Egypt about six months ago and in recent days they coordinated some of their moves," he added.

"I would not exclude the possibility that if (presidential) elections take place in Egypt, the Brotherhood would not nominate someone from their ranks but would support someone like Baradei."