(Reuters) - The New Year´s Day bombing of a church suggests al Qaeda- inspired militants have a toe-hold in Egypt, but probably does not indicate a return to the kind of Islamic insurgency Egyptian forces crushed in the 1990s.

No clear official account has emerged of how the January 1 attack, which killed 21 people, was carried out, but analysts point to a small cell, not a bigger militant group like those which challenged the government more than a decade ago.

Whoever was behind it, the attack seemed designed to upset Muslim- majority Egypt´s fragile sectarian balance. It was the biggest attack in at least a decade aimed at Coptic Orthodox Christians, who form 10 percent of Egypt´s 79 million people.

The reaction was swift. Within moments of the blast, Christians took to Alexandria´s streets in protest. Some Muslims and Christians hurled stones at each other. A day later police fired teargas in Cairo to disperse angry crowds.

"I do not expect a spread of terrorism in Egypt and a return of terror attacks that took place in the 1980s and 1990s," said Amr Elchoubaki, an expert in Islamic movements at the Al-Ahram Center for Political and Strategic Studies.

"But I am more concerned about the internal climate and the impact of any attack, even if limited, on relationships between Muslims and Christians," he said.

The government was quick to call for national unity, blamed foreign hands and pledged to track down the perpetrators.

Whether it involved Egyptians or foreigners, analysts said the scale, planning and timing suggested al Qaeda-inspired militants may have been behind it. It followed Islamist calls, made on the Web, for attacks on Coptic churches at this time.

"The first and most likely possibility is that a sleeper cell of an al Qaeda group carried out this operation and this would mean that al Qaeda has penetrated the Islamic political movement in Egypt," said analyst Nabil Abdel-Fattah.

The state crushed groups such as al-Gama´a al-Islamiya and Islamic Jihad, which targeted tourists, Christians, government ministers and other officials in a 1990s campaign for a purist Islamic state, and has kept a tight lid on such groups since.

"An attack like this would have taken probably about a dozen operatives. We cannot rule out the possibility of local elements," said Fawaz Gerges, a Middle East professor at the London School of Economics.

Safwat Zayaat, a military expert in Cairo, said the latest attack on Christians was the kind of operation "that does not require much networking but needs to identify a point of weakness. One act will echo globally and inspire many others."

By contrast, in the 1990s, Egypt had been dealing with "groups that may have been inspired by a global ideology but had a local focus to oust (President Hosni) Mubarak´s government."

SPORADIC ATTACKS

Egypt has suffered sporadic attacks in the last decade, such as deadly bombings of tourist resorts between 2004 and 2006, but has avoided any return to the sustained violence of the 1990s.

Lawyer Montaser al-Zayat, who has defended militants over many years, questioned whether the perpetrators were inspired by al Qaeda, saying Egyptian militants may have become more radicalized simply because of rising sectarian strife.

However, the attack was unusual for Egypt -- officials have blamed a suicide bomber -- and it followed a series of militant threats against the church, starting with one in November issued by an Iraq- based group linked to al Qaeda.

Two weeks before the bombing, a statement on an Islamist website urged Muslims to target churches in Egypt and elsewhere, including the one hit in Alexandria. Another website after the attack said it was the "first drop of heavy rain."

An Egyptian security source said an effort was under way to list people who had arrived in Egypt recently from countries "where al Qaeda is known to recruit and train operatives."

Some say Iraq has become a training ground for Arab and other militants, just as Afghanistan was in the 1980s.

SECTARIAN WEAK SPOT

By attacking a church, militants have highlighted Egypt´s growing sectarian divide, as well as what some analysts see as the government´s reluctance to stir up Islamists by tackling long- standing Coptic grievances about unfair treatment.

The opposition Muslim Brotherhood, which renounced violence as a means to effect change in Egypt decades ago, said the attack showed the state´s failure to protect its citizens.

"The government should have increased security measures (for churches), especially after the Iraqi threats," said Mohamed el- Katatni, a senior Brotherhood member.

The bombing was on a much bigger scale than the spontaneous scuffles or killings more typical of Egypt´s brand of sectarian violence, often sparked by disputes over church-building or taboo relationships between men and women of different faiths.

In the worst such incident in the past year, six Christians were shot dead, along with a Muslim policeman, outside a church in southern Egypt on January 6, the eve of Coptic Christmas.

Hisham Kassem, a human rights campaigner and publisher, said many Christians would perceive the New Year´s Day bombing through a sectarian prism because they feel marginalized.

"Right now Copts feel Muslims (as a whole) struck at them, rather than seeing it as a terrorist attack by a Muslim, and it is due to this ... feeling of discrimination," he said.

Rights activist Hossam Bahgat, whose group reported in April on rising sectarian violence, said Egypt had boasted to other governments about its success in quashing militants but was not doing enough to address Christian grievances.

He said the bombing should encourage swifter action. "It will hopefully bring home the idea that this is extremely fragile and the situation could deteriorate very quickly."

(Additional reporting by Yasmine Saleh and Marwa Awad in Cairo, Bill Maclean in London, Muhanad Mohammed in Baghdad; editing by Alistair Lyon/Janet McBride) (© Reuters 2011 01/04/11)