One Egyptian policeman was killed and one injured during a raid on an armed Islamist group suspected of involvement in pipeline bombings that have disrupted gas supplies to Israel and Jordan, the state news agency reported.
The pipeline in the desert peninsula of Sinai has been attacked seven times this year as authorities have struggled to maintain control, especially since security was disrupted by the overthrow of President Hosni Mubarak in February.
Egypt's 20-year gas deal with Israel, signed in the Mubarak era, is unpopular with many Egyptians.
The policeman was shot dead when his unit approached the hiding place of two members of the armed Islamist group Al-Takfir Wa Al-Hijra (Excommunication and Exodus), news agency MENA reported on Monday, citing security sources.
Police arrested an Egyptian of Palestinian origin named Nour Mohamed who was accused of firing shots during the raid.
They found a hand bomb and radio parts commonly used to make explosives and some memory cards, mobile phone SIM cards and religious books, the news agency said.
The police arrested a member of the group earlier this month in the northern coastal city of al-Arish and MENA said they had been searching for two others who fled the scene, a Palestinian called Mohamed Abu Hashem and an Egyptian, Islam el-Sayed.
Egyptian officials say limits on troop numbers in Sinai under a 1979 peace treaty with Israel make it harder to secure the mountainous region. Local Bedouin say the area had been neglected for decades and some have taken to smuggling and gun-running to scrape a living.
Repeated attacks have caused weeks-long closures of the pipeline run by Egypt's gas transport company Gasco, a subsidiary of the national gas company EGAS.
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