The step escalated tensions between the two neighbours and threatened the 1979 peace treaty. Egypt's interim government accused Israel of violating the treaty and said its envoy in Tel Aviv would be withdrawn until Israel apologises for the incident.
"Egypt has decided to withdraw its ambassador to Israel until there is an official apology," state television said.
A statement issued after a rare meeting of the ministerial group of the crises-management committee said that Egypt has asked Israel to officially apologise for the attack.
"Egypt will never give up the rights of its sons." The meeting was attended by Deputy Prime Minister Ali el-Selmi and the ministers of international cooperation and planning, justice, interior, information, foreign affairs, information and health along with the head of the Egyptian intelligence service and Armed Forces commanders.
The meeting discussed clashes in Sinai that left an Egyptian army officer and four soldiers dead and several others injured. They were deployed at the border area inside the Egyptian territories, said Egyptian Information Minister Osama Heikal.
They were killed and wounded in the shoot-out between the Israeli forces and the armed groups inside the Israeli territories, he added.
The meeting also entrusted the foreign minister to summon the Israeli envoy in Cairo. Egypt is calling for an official probe into the incidents.