Israel has informed Egypt it intends to enter the Rafah and Philadelphi Corridor area in the south of Gaza but it "will not remain in the area permanently", Israeli media reported on Saturday.
Egypt was reportedly strongly in opposition to any attempt by Israel to establish control on the border region between Egypt and Gaza - known as the Philadelphi Corridor, according to a report by Sky New Arabia, citing sources.
Israel emphasised that its forces would not stay in the area for "a long time", the report said, adding that meetings between the two sides were agreed on to further discuss the matter.
The report comes following recent discussions by Israeli leaders about seizing the Philadelphi Corridor – a 14-kilometre route that runs along Gaza's southern border.
On relations with Egypt, Israeli Prime Minister Benjamin Netanyahu said in his press conference on Saturday that every country had its interests, and each state sought to achieve them. However, he added that relations with Egypt were "sound", stressing that every country "has its interests".
According to Sky News Arabia sources, his comments were seen as brushing off Egyptian opposition to the plans.
His statement came amid Israeli media reports that Egyptian President Abdel Fattah el-Sisi had had refused to receive a phone call from Netanyahu.
Earlier this month, The Wall Street Journal reported that Israel had informed Egypt of its plans to control the Philadelphi Corridor over allegations that Hamas was smuggling weapons through underground tunnels.
Egyptian State Information Service chief Diaa Rashwan said refuted the allegations, saying they were baseless "lies".
"The conclusion is that these false allegations do not serve the [Israel-Egypt] peace treaty that Egypt respects, and it demands that the Israeli side to show its respect for it also, and to stop making statements that would strain bilateral relations in light of the current inflammatory conditions," Rashwan said.
He added that Israel was attempting to cover up the failure to achieve its Gaza war objectives.
Israeli forces say they have imposed a punishing siege on the southern Gaza city of Khan Younis, where intense battles between Palestinian groups and Israel's army are taking place.
The army's pounding of Khan Younis, which was previously designated as a "safe zone" for hundreds of thousands of Palestinians fleeing the north, has pushed many civilians to escape to the smaller border city of Rafah.
This has raised fears in Cairo that Israel will attempt to expel the population to Egypt's Sinai desert.
Egypt has repeatedly pushed back at suggestions that it could facilitate the expulsion of Gazans by absorbing the territory's population with Israel planning to seize the coastal strip.