Updated

An Egyptian court has ruled against the government's decision to hand over two Red Sea islands to Saudi Arabia — a landmark verdict likely to deepen tensions with the kingdom.

Monday's ruling rejected the government's appeal against a lower court's decision to annul the handover agreement, signed in April.

The Supreme Administrative Court said the two islands, Sanafir and Tiran, are Egyptian, debunking the government's claim that they were Saudi.

The islands at the mouth of the Gulf of Aqaba control the narrow shipping lanes running north to the Red Sea port cities of Eilat and Aqaba, in Israel and Jordan.

The fate of the two islands has been at the heart of friction between Riyadh and Cairo over a string of regional issues, including Syria and Yemen.