http://en.wikipedia.org/wiki/Lavon_Affair Also;
"The Lavon Affair
By David Hirst
Excerpts from his book: The Gun and the Olive Branch, 1977, 1984, Futura Publications
In July 1954 Egypt was plagued by a series of bomb outrages directed mainly against American and British property in Cairo and Alexandria. It was generally assumed that they were the work of the Moslem Brothers, then the most dangerous challenge to the still uncertain authority of Colonel (later President) Nasser and his two-year-old revolution. Nasser was negotiating with Britain over the evacuation of its giant military bases in the Suez Canal Zone, and, the Moslem Brothers, as zealous nationalists, were vigorously opposed to any Egyptian compromises.
It therefore came as a shock to world, and particularly Jewish opinion, when on 5 October the Egyptian Minister of the Interior, Zakaria Muhieddin, announced the break-up of a thirteen-man Israeli sabotage network. An 'anti-Semitic' frame-up was suspected.
>snip
The first bomb went off, on 2 July, in the Alexandria post office. On 11 July, the Anglo-Egyptian Suez negotiations, which had been blocked for nine months, got under way again. The next day the Israeli embassy in London was assured that, up on the British evacuation from Suez, stock-piled arms would not be handed over to the Egyptians. But the Defence Ministry activists were unconvinced. On 14 July their agents, in clandestine radio contact with Tel Aviv, fire-bombed US Information Service libraries in Cairo and Alexandria. That same day, a phosphorous bomb exploded prematurely in the pocket of one Philip Natanson, nearly burning him alive, as he was about to enter the British-owned Rio cinema in Alexandria. His arrest and subsequent confession led to the break-up of the whole ring-but not before the completion of another cycle of clandestine action and diplomatic failure. On 15 July President Eisenhower assured the Egyptians that 'simultaneously' with the signing of a Suez agreement the United States would enter into 'firm commitments' for economic aid to strengthen their armed forces. On 23 July --anniversary of the 1952 revolution-- the Israeli agents still at large had a final fling; they started fires in two Cairo cinemas, in the central post office and the railway station. On the same day, Britain announced that the War Secretary, Antony Head, was going to Cairo. And on 27 July he and the Egyptians initiated the 'Heads of Agreement' on the terms of Britain's evacuation."
More at;
http://www.aljazeerah.info/Opinion%20editorials/2003%20Opinion%20Editorials/October/16%20o/The%20Lavon%20Affair%20By%20David%20Hirst.htm