Bedouin smugglers and Israeli car thieves have jumped the gun on normalization of trade relations between Israel and Egypt by reportedly burying hundreds of stolen Mercedes and other expensives vehicles in the shifting sand dunes of the Sinai Peninsula.

According to Israeli border police, the cars were stolen in Israel and buried in the 7,000-acre desert that is to be returned to Egypt Friday after having been captured by Israeli troops in the 1967 Six-Day War. The border police reported that by using aerial reconnaissance aircraft and metal detection devices to find the caches, they have dug up 34 cars in the past two weeks. In all they believe 345 cars have been stolen and buried; 128 have been recovered.

Authorities said the Bedouin tribesmen, known for centuries for their resourcefulness in smuggling goods across international borders, formed stolen car rings with Jewish thieves in Israel in anticipation of the transfer of the Sinai to Egypt. The thieves, officials said, surmounted the problem of transporting stolen vehicles across an international boundary simply by waiting for the border to move beyond their buried loot.

"It's a well-organized gang doing this," said intelligence superintendent Shalom Uriel of the Israeli Sinai police.

The cars -- mostly Mercedes, Volvos, BMW's and Peugots -- were shrouded by the thieves in canvas or camouflage nets normally used to cover Army tanks and the covered with sand while the thieves waited for Friday's transfer of the fifth section of the Sinai in accordance with the Camp David peace agreements. Police said many of them had been repainted and stamped with new serial numbers for easy transport to Cairo and other Egyptian cities. Some even had been affixed with Egyptian license plates and Arabic windshielf stickers, they said.

In one big haul this week, border police and customs agents uncovered 40 Mercedes near Jebil Narra, in central Sinai, and several large trucks stolen from klbbutzim across the border. Officials said the vehicles were so well hidden that patrols at first passed the mounds without detecting anything.

Col. Nissim Maoz, who is heading the search, said the practice was first uncovered in March, two days before the northern Sinai town of El Arish was returned to Egypt. The number of cars buried, he said, has dramatically increased as the turnover of two-thirds of the Sinai Peninsula nears completion. He said the search, dubbed Operation Sharp Vision will continue until Friday afternoon, when the Israeli withdrawal is officially completed. All but a handful of Army personnel already have withdrawn.

Police said that the thieves had managed to avoid dozens of roadblocks by driving the cars across the desert at night. Some of the cars contained television sets, air conditioners and other appliances destined for duty-free transport to Cairo.

Residents of Cairo told Israeli-based reporters on a recent visit to Egypt that the stolen Mercedes were easy to spot because most of them are limousine-length vehicles used in Israel as jitney intercity cabs and carry oversized roofracks.