The Egyptian army has killed 15-17 miltiants in an "anti-terrorist" military operation in Sheikh Zuweid, North Sinai, Reuters' Aswat Masriya website reported.
For two hours late on Saturday evening army Apache helicopters reportedly targeted "terrorist" sites in the town of Al-Thoma, south of Sheikh Zuweid.
According to Aswat Masriya, the army used loudspeakers to warn citizens against leaving their homes to shield themselves from rocket fire from military helicopters.
However, a number of small houses caught fire as a result of the bombing, according to Al Ahram Arabic news website.
Aswat Masriya also reported windows in residences were damaged as a helicopter dropped a rocket in the area.
The army found and took hold of a depot full of explosives and rocket-propelled grenades (RPG), according to Al Ahram.
Egyptian armed forces spokesman Colonel Ahmed Ali had issued a statement on Saturday night saying that the army has "uncovered and dealt with terrorist groups" in North Sinai. These groups, the statement said, include culprits behind the killing of 16 Egyptian soldiers near the border with Israel in the summer of 2012.
Meanwhile, eyewitnesses told Aswat Masriya that armed assailants attacked a government administration building in Al-Arish city before army forces returned fire.
Earlier on Friday afternoon, an explosion destroyed a rocket launcher near the Egypt-Israel border in North Sinai, and at least five Islamic militants were killed.
The attack was followed by conflicting media reports, some claiming the attack was launched by the Israeli forces in coordination with Egyptian authorities. However, Ali denied such claims. Meanwhile, the Israeli army spokeswoman declined to comment on the alleged attack.
Sinai has experienced a security vacuum since the fall of president Hosni Mubarak's regime in 2011. The situation escalated after the army deposed president Mohamed Morsi on 3 July amid protests against him. Militants have repeatedly attacked police and army sites in the peninsula leaving dozens dead.
Last week, the army announced it arrested 103 "terrorists", currently being interrogated, and that 60 were killed in its crackdown on terrorism during the period from 5 July to 4 August.