Egyptian troops and policemen battled with gunmen in the Sinai peninsula Monday, killing one person and arresting 16 others, a security official and state television said.

The fighting came as the security forces launched raids to hunt down Islamist militants suspected of attacking a gas pipeline to Israel on five occasions this year and police stations, the official said.

Around 1,000 soldiers and policemen forces deployed on Friday and Saturday in northern Sinai to carry out the operation dubbed "Eagle."

A man was killed at dawn Monday during an exchange of fire between suspects wanted by the Egyptian authorities and soldiers and policemen, the security official said.

"Ten people suspected of involvement in the Sinai attacks were arrested," the official said, adding that three automatic rifles and four grenades were also seized.

Egyptian state television earlier reported that security forces also arrested six suspected Islamists, members of a group calling itself the Army of the Liberation of Islam.

The operation came two days after Islamists distributed flyers in Rafah -- signed "Al-Qaeda in Sinai" -- threatening more attacks on police, according to a witness, after a deadly attack at the end of July two week earlier killed a military officer and three bystanders.

There have also been five bombing attacks this year on a pipeline that exports gas to Israel, the last one occurring at the end of July.

Egypt supplies about 40 per cent of Israel's natural gas, which is used to produce electricity.

Earlier Monday Israeli public radio reported that Prime Minister Benjamin Netanyahu had approved Egypt's request to increase the number of troops in the Sinai to "restore order" in the region.

The number of Egyptian forces in the peninsula are limited by the terms of the 1979 Israel-Egypt peace treaty.