Electronic – Pull-up resistors required on both side of level shifter

You can use an I2C bus extender which can act as a buffer in between the two devices.

http://www.nxp.com/documents/data_sheet/P82B715.pdf

These devices may have other names as well, like I2C bus "line buffer". They're made by a variety of manufacturers (TI and NXP come to mind). Pick one that fits your needs.

According to version 4 of the \$\mathrm{I^2C}\$ spec,

"Due to the variety of different technology devices (CMOS, NMOS, bipolar) that can be connected to the I2C-bus, the levels of the logical ‘0’ (LOW) and ‘1’ (HIGH) are not fixed and depend on the associated level of VDD. Input reference levels are set as 30 % and 70 % of VDD; VIL is 0.3VDD and VIH is 0.7VDD. See Figure 38, timing diagram. Some legacy device input levels were fixed at VIL = 1.5 V and VIH = 3.0 V, but all new devices require this 30 %/70 % specification. See Section 6 for electrical specifications." (page 9)

Deeper in the spec, you'll see that this \$ 0.7 \times V_{DD}\$ is the minimum logic high voltage:

For your 5V system:

\$ 0.7 \times 5 V = 3.5 V\$

\$ 0.3 \times 5 V = 1.5 V\$

To me, the 3.3 V pull-up looks marginal, especially if any of your 5V devices use the 'new' standard of \$ 0.7 \times V_{DD}\$ for logic HIGH.

Your mileage may vary, but it's always best to be within the spec wherever possible...