I've been staying away from one Egyptian story because I initially thought the reports were a bit exaggerated. The background: A week or so ago, the Sheikh al-Azhar, Sheikh Muhammad Sayyid al-Tantawi, asked a female student wearing the full niqab (in which the face is fully covered) why she did so, since it was not a part of Islam and was merely a traditional practice. Al-Masry al-Youm played this story up, but I suspected that it was actually exaggerating a bit since it wasn't clear if Tantawi's remark was merely off-the-cuff or indicated a plan to discourage the niqab.
Then the BBC picked the story up, indicating that Tantawi planned to ban the full niqab altogether, and then a Constituional Court Ruling held that institutions had the right to ban the niqab. Now Tantawi and the Ministry of Education have officially banned the niqab from classrooms and dormitories. For those who don't read Arabic, there's an English report here.
Tantawi's ban only applies to al-Azhar and related institutions, so the Ministry of Education also acted. The Education Ministry clarified that women could still wear niqab to classes, provided they show their face to male security guards, but that the niqab would be banned in dormitories.
While Tantawi and other Egyptian clerics have emphasized that niqab is not a requirement of Islam, the comments by the Education Ministry seem to emphasize security issues; certainly the security establishment is uncomfortable with any custom which completely conceals identity and, at the same time, tends to be adopted by the most radical Islamists. (This only applies to the niqab, which fully covers the face, not the hijab, the very widespread head-scarf covering the hair.)