Egypt's Mubarak says Israel faked smuggling evidence

CAIRO (Reuters) - Egyptian President Hosni Mubarak has accused Israel of fabricating evidence it says implicates Egyptian security forces in helping Hamas militants smuggle arms into Gaza, and warned Israel not to ruin its ties with Egypt.

Mubarak's comments were made to Israeli daily Yedioth Ahronoth and were carried by Egypt's state news agency MENA on Thursday, a day before publication of the interview in Israel.

Israeli Foreign Minister Tzipi Livni said this week Egypt was doing a "terrible" job of stopping the flow of arms, and Israeli foreign ministry officials said Israel had sent a videotape to Washington showing Egyptian security forces helping Hamas militants smuggle arms across the border.

"Our officials (saw the pictures)... and I'm informing you that they're fabricated pictures and computer work... Anybody can make pictures of arms smugglers...I can organize pictures of an Israeli man and an Israeli woman smuggling arms and plotting a terrorist operation," Mubarak said, according to MENA.

"Anyone who tries to accuse Egypt of cooperating with arms smugglers, I tell him he's a big liar," Mubarak said.

An Israeli foreign ministry spokesman declined to comment on Mubarak's remarks.

Mubarak also lashed out against criticism that Egypt was not doing enough to prevent arms being smuggled into Gaza.

"If the way we deal with the arms smuggling is not good enough for you, please, do the work yourselves," Mubarak said in excerpts published in Yedioth Ahronoth on Thursday.

He said Livni "who ran to the media to complain about us and to grade us, instead of picking up the phone or sending an envoy, has crossed my red lines," according to the paper.

Livni told an Israeli parliamentary committee on Tuesday that Egypt's failure to stop arms smuggling risked strengthening Hamas over President Mahmoud Abbas's Fatah, backed by the West.

"It's very easy to sit in an office in Jerusalem and grade us on our performance in the field, but it has soured the atmosphere. And relations with Israel are very important to me. Don't spoil them," Mubarak said.

Egypt rejected Israeli complaints about weapons smuggling into Gaza after talks between Mubarak and Israeli Defense Minister Ehud Barak on Wednesday, and said Israel was trying to distract attention from Jewish settlement building.

(Writing by Aziz El-Kaissouni; Editing by Ibon Villelabeitia)