CAIRO, Aug 21 (Reuters) - Egypt welcomed a joint investigation with Israel on the killing of five Egyptian security personnel during an Israeli border operation, but said on Sunday the response was insufficient given the gravity of the situation.

Egypt said on Saturday it would recall its ambassador from Israel, insisting the killing of five Egyptian security personnel while Israeli forces were pursuing gunmen across the border was a breach of its 1979 peace treaty with the Jewish state.

Egypt's Foreign Ministry later called in the Israeli charge d'affaires, delivered a protest and demanded a joint investigation into the deaths.

Israeli Defense Minister Ehud Barak said Israel regretted the deaths, which followed attacks in its border area that had killed eight people and sparked the most serious crisis in ties with Egypt since longtime ruler Hosni Mubarak's overthrow in February.

Barak also said he had instructed the Israeli army to conduct a joint investigation with Egypt.

The Egyptian government considers the approval to conduct a joint investigation to uncover the circumstances of the incident a fundamental step to prevent the occurrence of such accidents as Egyptian blood is not cheap and the government will not accept that Egyptian blood gets shed for nothing, Egypt's state news agency MENA said.

The Israeli decision to work with Egypt to investigate the killings is positive in appearance but does not fit with the weight of the incident and the state of Egyptians' outrage from the Israeli actions, MENA added, quoting a cabinet statement released after a second round of a ministerial crisis meeting headed by Prime Minister Essam Sharaf late on Saturday.

And as Egypt confirms it is keen on the peace with Israel, Tel Aviv also will have to share its responsibilities in protecting that peace, MENA said.

The statement said the government had asked for a deadline for the joint investigation to conclude its work, adding that crisis meetings would continue until the results are released.

The cabinet, with army generals in attendance, has been holding crisis meetings daily since Friday after thousands of Egyptians protested in front of the Israeli embassy in Cairo overnight, burning Israeli flags, tearing down metal barriers and demanding the expulsion of the Israeli envoy.

Hundreds of Egyptians continue to protest outside the embassy. One protester burned the Israeli flag and replaced it with the Egyptian one, a Reuters witness reported. (Reporting by Yasmine Saleh, Ali Abdelatti and Amr Dalsh, Writing by Yasmine Saleh; Editing by Michael Roddy)