On Sunday evening, masked gunmen killed at least 15 Egyptian guard officers at a security checkpoint near Israel's Kerem Shalom crossing, attacking with automatic rifles and weapons mounted on their vehicles, a security official said.
Gunmen dressed as Sinai Bedouins arrived in two vehicles and opened fire on the post, according to a security official. The attack left 15 dead, according to another security official who also reported seven wounded.
Al Jazeera news later put the number of Egyptian soldiers dead at 20.
Egyptian state television reported that an Islamist militant group was behind the attack.
On the other hand, the Ahram newspaper reported that the attackers hail from a Salafist group called Al Takfir wal Hijra.
Security sources told Reuters that the attackers used a stolen police vehicle to launch the attack and fired live ammunition at police officers at the station.
Meanwhile, Egypt's President Morsi called for an urgent meeting with Egypt's military council over Sinai attack, an official from Morsi's party said on Facebook, Haaretz news reported.
An Israeli military spokesman said that one of the vehicles used in the attack crossed into Israel and was hit by Israeli forces. He declined to elaborate.
Israel's army spokeswoman Avital Leibovich wrote on her Twitter page that Israel targeted the vehicle from the air. She wrote that another vehicle exploded at the Kerem Shalom border crossing but that no Israelis had been killed.
In response to the attack, Israeli army asked all residencies in the Kerem Shalom area to stay in their homes, for reasons of safety. Israel's army spokeswoman wrote.
"From information at our disposal, it arises that terrorist organizations in the Gaza Strip and additional elements are actively planning to perpetrate terrorist attacks, especially abductions, against Israeli tourists in Sinai in the immediate term," a statement from the Israeli prime minister's office said.
In April, Israel said a rocket fired from the Sinai hit the resort of Eilat, causing no injuries, while last August cross-border infiltrators shot dead eight Israelis. Israeli soldiers repelling the attack killed five Egyptian guards.
However, the Egyptian Sinai Peninsula was relatively quiet for three decades after the two countries signed a peace treaty in 1979. But Israel says that since the fall of Mubarak, Cairo has lost its grip on the Sinai Peninsula.