I've previously discussed the anomalous position of Egypt: still nominally an Ottoman province ruled by a hereditary Khedive, yet a de facto virtual British protectorate since 1882. (Later this month we'll see how Britain resolved the contradiction in December 1914.)
Before the British occupation of Egypt, the boundaries of Egypt and the remainder of the Ottoman Empire were somewhat fluid. Northwestern Sinai and the northern coast were generally administered from Egypt, while southern and southeastern Sinai were administered from the Hijaz. In the late 19th century the Ottomans considered the boundary to be, and many maps showed it as being, a line from Suez to Rafah, thus excluding most of the southern and eastern Sinai. Egypt however was allowed to garrison locations beyond this line to protect the pilgrimage trade.
After the British arrival in 1882 Britain wanted a buffer zone for the defense of the Suez Canal, A line beginning at Suez would allow Ottoman troops right up to the Canal. The British favored an Egyptian control of the entire geographical Sinai peninsula, seeing the "natural" frontier as running from Rafah to Taba, just short of ‘Aqaba. When, in 1892, the Khedival office passed to ‘Abbas Himi II, the Ottoman Sultan issued the traditional firman confirming him in office and stipulating the claimed line from Suez to Rafah. This was protested by Sir Evelyn Baring, soon to be Lord Cromer, on the grounds that previous firmans had specified Egyptian rights to garrison troops beyond this line. Constantinople assured Egypt it intended to maintain the status quo based on Egypt's right to protect the overland hajj route, but making clear ‘Aqaba would be Ottoman; Baring meanwhile instructed the Egyptian Foreign Minister that Britain recognized Egypt's authority "bounded to the east bya line running in a south-easterly direction from a point a short distance to the east of El Arish to the head of the Gulf of Akaba," but leaving the town of ‘Aqaba under Ottoman control.
The dispute over the Sinai border led directly to the crisis of 1906. By this time the Ottomans had completed the Hijaz railway as far as Ma‘an in what is now Jordan. A spur line to ‘Aqaba was under consideration; that would give the Ottomans a rail outlet on the Red Sea, freeing them from dependance on the Suez Canal.
In December of 1905 Cromer learned from intelligence sources that in response to Egyptian plans to build a barracks near the claimed border, The Ottoman government was ordering additional troops to the region and planned to establish a guardhouse to prevent this.
The British ordered their Inspector for Sinai, in effect the British officer in charge of the frontier, W.E. Jennings-Bramly (Bramly Bey) to the region with five Egyptian troops to set up tents at Umm Rashrash, the site of the present Israeli port of Eilat. He did so on January 10, 1906. He met with the local Turkish commander at ‘Aqaba, Rushdi, who after consulting Damascus informed Bramly that he was in Ottoman territory and that Turkey was planning to set up border posts at Taba and Kuntilla, two places with water sources on what the British considered their (that is, Egypt's) side of the line.
Confronted with Turkish demands and orders not to provoke, Bramly retreated to his headquarters at Nakhl by January 14. The Director of Intelligence in Cairo, Captain R.C.R. Owen, ordered the Egyptian Coast Guard Steamer Nur al-Bahr to the area, with Sa‘ad Bey Rifa‘t, who had governed ‘Aqaba for Egypt prior to 1892, and 50 troops, with orders to land at Ras al-Naqb near Umm Rashrash and possibly at Taba. On January 23 they reported to Bramly that there were Turkish forces at Taba and they had threatened to fire on the Egyptians if they attempted to land. Instead the Egyptian force settled in just offshore, off Fara‘un Island.
Now things began to escalate. The Ottomans also put a force at Ras al-Naqb and began building up troops in the area. Bramly was told to hold his position but not initiate hostilities. But with the two sides confronting each other, Owen dispatched the Assistant Director of Intelligence in Cairo, o replace Bramly on February 14. Bramly returned to Nakhl and his duties governing Sinai.
The situation worsened. When a British agent went ashore at Rafah from HMS Minerva, local Turkish authorities ordered him out and the British reported the Ottomans were destroying the border posts. On May 3, the British had had enough of negotiation and dispatched an ultimatum: the Ottomans must agree to demarcate the line along the Rafah-Taba route or Britain would take military action: not necessarily in this remote area, but by seizing Turkish islands in the Aegean.
It was 1906, not 1914. The Young Turk Revolution was two years in the future. The "Sick Man of Europe" was still quite ill. France and Russia rushed to Britain's support, but Germany held back from backing the Ottomans. The Sultan's government was in a corner, and on May 14, the Ottomans agreed to a joint demarcation.
That took place during the summer of 1906 and created the present border between Egypt and what are now Gaza and Israel. Taba, today a major resort town, would be the subject of the 1988 arbitration mentioned earlier.
Ironically, when the First World War actually broke out, the British decided it would be too costly to erect defenses along the Rafah-Taba line, and decided to defend the eastern approaches to the canal much closer to that vital artery of Empire.