JERUSALEM, Dec 24 (Reuters) - Israeli Foreign Minister Tzipi Livni said on Monday Egypt had done a "terrible" job of trying to stop arms smuggling into the Hamas-controlled Gaza Strip and she warned of the implications for the region. Hamas took control of Gaza in June, prompting Israel to tighten its military and economic cordon around the coastal territory.

But Israel says Hamas has been able to smuggle in weapons and ammunition, mostly through tunnels under the so-called Philadelphi Corridor that separates Egypt and Gaza.

"Egyptian actions in the war against smuggling in the Philadelphi Corridor are terrible and definitely have implications for future problems in the region, such as the arming of Hamas in Gaza," Livni was quoted by an Israeli parliamentary spokesman as telling a key committee.

The Egyptian government says it is doing its best with the personnel it is allowed to deploy at the border under the 1979 peace treaty and a subsequent agreement with Israel.

Livni's comments come two days before Israeli Defence Minister Ehud Barak is scheduled to visit the Red Sea resort of Sharm el-Sheikh for talks with Egyptian President Hosni Mubarak.

The talks are expected to focus on smuggling and efforts to free an Israeli soldier captured by Gaza militants in June 2006.

Israel pulled troops and settlers out of Gaza in 2005, but still controls key crossing points, airspace and coastal waters. (Writing by Ari Rabinovitch; editing by Andrew Roche)

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