Unidentified gunmen shot at an Egyptian security checkpoint in the Sinai region, scene of an army offensive against Islamist militants, early on Sunday, Egyptian and international officials said.
But an official for the Sinai international peacekeeping force, which helps maintain the peace accord between Israel and Egypt, denied that its own troops had come under fire.
An Egyptian official had said gunmen opened fire on the peacekeeping troops in the Um Shyhan area of central Sinai, without causing any injuries, after shooting at a police checkpoint and clashing with Egyptian security forces.
"We were not fired upon," said Kathleen Riley, Cairo representative of the Multinational Force and Observers (MFO) which has monitored movements of troops and military equipment along Egypt's border with Israel since their 1979 peace treaty.
"There was some firing on an Egyptian army checkpoint or police checkpoint not too far away. We were able to hear the shots but we had absolutely no attacks upon our staff."
The incident follows the start of an Egyptian operation targeting Islamist militants in Sinai suspected of killing 16 border guards a week ago.
The government in Cairo has sent armored vehicles and hundreds of troops in the biggest build-up in the treaty's demilitarized zone since Egypt's 1973 war with Israel.
Israel has called upon Egypt to crack down on growing lawlessness in the Sinai, which has become a hideout for jihadi groups opposed to Israel.
Israeli officials say they approve of the Egyptian military operation and the peacekeepers say they are continuing their work in coordination with the two sides.
Armed assailants have attacked several checkpoints since last Sunday's attack on the border guards.
Egypt says 7 suspected militants killed in Sinai
Egyptian military forces killed seven suspected militants on Sunday during raids on hideouts in a village in northern Sinai, security officials said.
Tensions in Sinai, the desert peninsula that borders Israel and the Gaza Strip, have escalated sharply over the past week after suspected militants killed 16 Egyptian soldiers near the border. The deaths were the first reported casualties among suspected militants since Egypt launched a major offensive against the groups and sent reinforcements to the area following the attack last Sunday.
Security officials said the raids targeted the villages near El-Arish of al-Ghora and al Mahdiyah and the forces seized landmines, an anti-aircraft missile and heavy machine-guns.
They spoke on condition of anonymity because they were not authorized to speak to the media.
In a separate incident, three policemen were killed and four others injured when their car turned over while chasing a group of criminals in central Sinai, Egypt's official Middle East News Agency, MENA, reported.
It also said that suspected militants fired at a security checkpoint before escaping in northern Sinai on Saturday. No casualties were reported.
Large swathes of northern Sinai have plunged into lawlessness following Hosni Mubarak's ouster in the uprising last year, with a massive flow of arms smuggled from Libya finding their way into the hands of disgruntled Bedouins.
The lawlessness is coupled with the rise there of al-Qaida-inspired militant groups waging a campaign of violence against Egyptian security forces. They have also staged several cross-border attacks on Israel.
Some of Sinai's native Bedouins are resentful of what they see as the police's heavy-handedness and neglect by the central government in Cairo. Recent years saw some Bedouins trafficking in black African migrants seeking a better life in neighboring Israel, growing illicit drugs and supplying Gaza's merchants with goods that are smuggled through a network of underground tunnels.
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