Egyptian president Abdul Fattah al-Sisi says a huge plot is being waged against his country by external jihadist forces.
He was speaking a day after more than 30 soldiers were killed in attacks by unspecified fighters in the Sinai peninsula.
In a live televised address, Mr Sisi said Egypt was facing “an existential battle” from the Islamist insurgency, based mostly in the Sinai, that has raged since the ousting of his predecessor, Mohammed Morsi, last year.
The former army chief said the military would respond by taking measures likely to include displacing thousands of residents to enlarge a military buffer zone near the border with the Gaza Strip.
Egypt’s council of ministers also proposed a measure which would see military courts used to try civilians accused of offences such as blocking roads or attacking public property.
Ending martial law throughout the country, which gives the authorities wide-ranging policing powers, was one of the demands of the popular uprising that ousted Hosni Mubarak in 2011 and paved the way for Morsi’s election a year later.
The proposed measure on military courts threatens to revive some of its most repressive aspects and could be used alongside a strict new law curbing protests.
A three-month state of emergency went into effect on Saturday in parts of North Sinai where the attacks happened.
No group has claimed responsibility, but Egyptian officials said militants operating in Sinai were inspired by Islamic State, the Al Qaeda offshoot now targeted by US-led airstrikes in Iraq and Syria.
Mr Sisi said the attacks had benefited from “foreign support” without specifying a particular country or group.