An existing model that examines the effects of habitat destruction in forest ecosystems is analysed in detail and modified for application to coral reefs. This allows a comparison of the relative rates of species extinctions, as habitat fragmentation increases, for the two different ecosystems. Field data from the reefs in Eilat, Israel, suggests that a large class of corals have both poor recruitment abilities and low abundances; characteristics that make these corals highly sensitive to disturbance. In such a scenario, the model finds coral reefs to be extremely fragile, and predicts a relatively large number of species extinctions with only mild habitat destruction. The unusual effects of species indirect interactions are also analysed, and the equilibrium distributions of species abundances are determined analytically for a wide range of parameter regimes.