Egypt's interior minister said on Sunday the government had proof that the Army of Islam, a Palestinian group linked to al Qaeda, was behind the New Year's Day bombing of a church that killed 23 people.
The Army of Islam praised the attack but denied involvement.
Egyptian officials had suspected an al Qaeda-inspired bomber was behind the blast that ripped through a crowd outside the church in the city of Alexandria, prompting protests by Christians that the state had not done enough to protect them.
An Iraq-based al Qaeda group had called for attacks on Egypt's Coptic Christians, who make up one tenth of the population, before the church bombing.
"If elements of the Palestinian Army of Islam, linked to al Qaeda, thought they had hidden behind elements that were recruited, we have decisive proof of their heinous involvement in planning and carrying out such a villainous terrorist act," Interior Minister Habib el-Adli said in a speech.
The bomber died in the blast, which wounded 97 people.
Egyptian state security had pointed to possible foreign involvement and officials said they were investigating several Palestinians who were perceived as possible threats.
A spokesman for the Army of Islam, which considers al-Qaeda's leaders as spiritual mentors, told Reuters in Gaza that the group "has no connection to the church attack in Egypt, though we praise those who did it."
President Hosni Mubarak, in an address broadcast on state TV, praised the police for their efforts to identify those responsible and said the attackers had sought to sow discord between Egyptian Copts and Muslims.
Sectarian tensions often flare over issues such as building churches or romantic relationships between members of both religions.
"We will not allow terrorism to shake our stability and horrify our people or attack the unity of Muslims and Copts," Mubarak said. "Egypt's security and stability are targeted."
The Army of Islam played a part in a cross-border attack in 2006 in the Gaza Strip in which Israeli soldier Gilad Shalit was abducted. The group later cut relations with Hamas, the Islamist group which controls Gaza, and has clashed with it.