A senior Suez Canal official said Iranian warships had yet to reach Egypt's waterway on Sunday to cross into the Mediterranean, in the first such passage since Iran's 1979 Islamic revolution.
Iranian media reported earlier that the ships were already in the Mediterranean and on their way to a Syrian port.
"No Iranian ships have passed. Not today, not yesterday, not the day before," the head of the canal's operations room, Ahmed al-Manakhly, told AFP by telephone.
Manakhly did not say when the Iranian ships were scheduled to arrive but canal officials have privately said they were expected early on Monday.
The military, which has been running Egypt since President Hosni Mubarak was toppled on Feb. 11, approved Iran's request to send the ships through the canal, an Egyptian army source said on Friday.
The request was a difficult one for Egypt's interim government. Cairo is an ally of the United States and has a peace treaty with Israel, and its relations with Iran have been strained since Iran's 1979 revolution.
The prospect of Iranian warships sailing through the canal into the Mediterranean for the first time since 1979 alarmed Israel whose foreign minister, Avigdor Lieberman, described it as a provocation.
It is not known when the ships are expected to arrive at Port Said, the northern terminus of the canal on the Mediterranean. From there they are expected to sail to Syria.
Prime Minister Benjamin Netanyahu said on Sunday that Israel takes a grave view of the move.
We can see what an unstable region we live in, an area in which Iran is trying to take advantage of the situation that has arisen and broaden its influence by transferring two warships via the Suez Canal," he said in public remarks to his cabinet.
"Israel takes a grave view of this Iranian step," Netanyahu said, adding the Jewish state would need to boost defence spending as a result of Tehran's move and recent regional upheaval.
Israeli Defense Minister Ehud Barak has labeled the Iranian action as "hostile' and said Israel was closely monitoring the situation.
Foreign Minister Avigdor Lieberman said an Iranian naval presence in the area was a "provocation that proves the self-confidence and cheek of the Iranians is growing from day to day".
On Friday Iran's official Fars new agency, quoting senior naval commanders, said the ships are the 33,000-tonne refueling and support vessel Kharg and the 1,500-tonne light patrol frigate Alvand, both British-built.
The Kharg has a crew of 250 and can carry up to three helicopters. The Alvand is armed with torpedoes and anti-ship missiles.
Egypt's MENA news agency has reported that the request for the ships to pass through the Suez Canal said they were not carrying weapons or nuclear and chemical materials.