The assailants hit a residential house by mistake, and one of those killed had his legs and head blown off in the attack, hospital sources said.

Two police stations were also targeted by heavy machine gun fire, according to security sources, while witnesses said militants fired rockets at an army camp, with no casualties reported in those attacks.

Apache helicopters were seen pursuing the militants.

Earlier, gunmen wounded a soldier in a drive-by shooting at an army checkpoint in the same town, located on the Mediterranean around 40 kilometers (25 miles) east of Gaza.

The Egyptian army launched a major offensive earlier this week against militants in north Sinai, which has been rocked by deadly violence since the military ouster of President Mohamed Morsi on July 3.

Suspected militants have killed and wounded numerous members of the security forces in drive-by shootings and rocket attacks while the army has killed ten estremists since launching their latest operation, according to security sources.

Analysts attribute the sharp rise in Sinai violence to extremists seeking to take advantage of the political insecurity in Egypt following Morsi's ouster.

Egypt's military is preparing to launch an offensive against militants operating in the restive northern province.

Egypt has struggled to control security in the region since the ousting of former dictator Hosni Mubarak in 2011.

NTJ/SHI