Israel recognised for the first time on Wednesday that 11 members of a hardline group in Egypt carried out bomb attacks against US and British targets in Egypt.
Cairo on Sunday described those individuals as terrorists who were arrested for their plans to destabilise relations between Egypt, the United States and Britain.
"This is a decision that calls for astonishment," said Egyptian Foreign Minister Ahmad Abu al-Ghait in a statement quoted by the official Mena agency.
"These individuals can be labelled as terrorists as far as international standards go and this is all the more surprising that they are Egyptian Jews," he added.
Israeli President Moshe Katzav handed letters of thanks to Marcelle Ninio, Robert Dassa and Meir Zafran, three survivors of the group in their seventies, last Wednesday.
"These individuals can be labeled as terrorists as far as international standards go and this is all the more surprising that they are Egyptian Jews"
Egyptian Foreign Minister Ahmad Abu al-Ghait
Letters were also given to the families of other deceased militants, two of whom were sentenced to death and executed in Egypt.
The affair dates back to 1954 when the arrest of the 11 Egyptian Jews soon turned into a scandal in Israel after it was found out that the assailants were part of an underground group organised by Israeli military intelligence.
Their goal was to sabotage relations between Egypt and Western countries as Britain's withdrawal from the Suez Canal was being negotiated.
One of the militants committed suicide while in jail, two were sentenced to death by hanging and four others were freed after spending 14 years behind bars.
The incident forced the then defence minister Pinhas Lavon and intelligence Chief Benyamin Gibli to resign from their positions in 1955.