One of the giant projects that are presently adopted by the government is that of the reclamation of desert land in Sinai as a trial to make use of each drop of wasted desert water. Towards that goal the water that is being continuously drained into the Mediterranean has been consumed in the construction of a new man made canal El-Salam canal. It has been mixed with 50% of agricultural drainage water through some of the drains that streams into Manzalah canal as Hadous and Serw drains. The main concept for constructing such a canal is to carry fresh water to arid lands in Sinai. Yet such projects may have both positive as well as negative sequels. The present study has been conducted to measure some physical parameters as water temperature and transparency, depth of water and electric conductivity. All parameters were found to increase towards the west. This is primarily due to the influence of mixing with agricultural drainage water. Some chemical parameters (dissolved oxygen; nitrites; nitrates; ammonia; inorganic phosphorus) were also measured where most of them showed significant increase in concentration. One hundred and fifteen phytoplankton species were studied. Chlorophyceae were the most abundant followed by Bacillariophyceae, Euglenophyceae, Cyanophyceae, Dinophyceae &Chrysophyceae, respectively. The highest density for phytoplankton recorded was during the spring season. In addition, chlorophyll a was investigated as an indication of the biomass. There is an inverse proportional relation was found between chlorophyll a and transparency. Statistical analysis was undertaken to clarify the relation between biomass and phytoplankton with the physical and chemical parameters.