There are a number of sties reporting that the undersea cable that connected Italy and Egypt has been cut, resulting in a fairly complete outage of Internet connectivity in many parts of the Middle-East.

Additional details here: http://www.theregister.co.uk/2008/01/30/india_mideast_lose_internet/

UPDATE 1:

See http://www.renesys.com/blog/2008/01/mediterranean_cable_break.shtml for additional technical information.