Egyptian troops in the Sinai Peninsula haved destroyed a vehicle laden with Grad rockets being smuggled from the Gaza Strip through a tunnel, a security source in the army told Aswat Masriya.

Troops targeted the vehicle during a raid early Thursday in the North Sinai town of Rafah. Militants in the south of the town were planning to use the weaponry to fire at Israel, the source said, as hostilities between Israel and Islamist movement Hamas, the dominant force in Gaza, rage on.

Upwards of 700 Palestinians, mostly civilians, and 32 Israeli soliders and three Israeli civilians have have been killed since the fighting began more than two weeks ago.

Since early 2013, Egypt's military has intensified a campaign against cross-border tunnels between Sinai and the Gaza Strip, used to smuggle food, fuel and other consumer goods into the Israeli-blockaded Palestinian enclave.

Egypt officials say the tunnels are used by militants on both sides to smuggle fighters and weapons.

Almost two weeks ago, security forces seized 20 Grad rockets along with their launching pads being smuggled from the Palestinian territory.

Separately, Egypt's army spokesman said two militants were killed Wednesday in a firefight with security forces in the northern part of Sinai. Fifteen others were arrested in the raids, part of a broad campiagn to crush Islamist militants in the underdeveloped desert region.

Egypt has intermittently opened its border crossing with Gaza, the only passage that bypasses Israeli control, since the violence broke out to take in Palestinians wounded in the Israeli ground and air offensives.

The passage is usually closed, with Egyptian officials citing security concerns in the volatile region where the army is battling an Islamist insurgency.

Egypt's government accuses Hamas of aiding Islamist militants in Egypt, charges the Islamist group denies.