Police and gunmen clashed on Thursday in the Sinai town of El-Arish, Egyptian TV said after the authorities vowed to crush a surge in Islamist militancy, although state news agency MENA denied the report.

The state-owned Nile News television said there were clashes outside a police station in the north Sinai town a day after reported air strikes killed 20 militants in a neighbouring village.

However MENA said later that a "security official denied reports that the... police station in El-Arish came under fire," in an account backed by witnesses who said they did not see or hear any clashes.

MENA said that a man driving a unlicensed car had fired several shots in the air on the street housing the police station, without aiming at it.

The conflicting reports came a day after security forces launched a campaign to uproot the militants following an attack by gunmen on a guard post near the border with Israel that killed 16 troops.

"Elements from the armed forces and interior ministry supported by the air force began a plan to restore security by pursuing and targeting armed terrorist elements in Sinai, and it has accomplished this task with complete success," it said.

Wednesday's reported air strikes in Tumah village -- the first in the peninsula for decades -- came as security forces massed near Rafah on the Gaza border for what they called a decisive confrontation with the militants.

A senior military official in Sinai said "20 terrorists were killed" in Apache helicopter raids and when soldiers from the 2nd Infantry Division stormed Tumah.

He said the militants were trying to escape when the helicopter targeted their vehicles.

Other security officials in the north of the peninsula reported air strikes near the town of Sheikh Zuwayid, close to the village.

The fallout from Sunday's attack, the deadliest for Egyptian troops in decades, spread to Cairo where President Mohamed Morsi sacked his intelligence chief and two generals.

Morsi's opponents have used the deadly Sinai incident to attack the Islamist president, whose Muslim Brotherhood has good relations with the Hamas rulers of the Gaza Strip.

Security officials say Sunday's attack against a border guard outpost that killed the 16 soldiers took place under cover of mortar fire from Gaza.

The militants themselves are believed to be mostly Bedouin, with support from hardliners in Gaza who view even the Islamist Hamas, which condemned the attack, as too moderate.

At a military funeral in Cairo for the soldiers on Tuesday, Morsi's opponents tried to assault his Islamist Prime Minister Hisham Qandil and chanted anti-Muslim Brotherhood slogans.

Officials close to the president, who did not attend the funeral, said he was outraged by the military and security's failure to secure the protest, which in part prompted Morsi's decision to fire the generals.

"The prime minister was subjected to an insult. It was unacceptable," said one official.

Before being sacked on Wednesday, intelligence chief Murad Muwafi, himself a former governor of North Sinai, issued a rare public statement saying his agency had forewarned of the weekend attack.

But he also said the intelligence did not specify where the attack would take place, and he had passed it on to the "relevant authorities," adding that his powerful agency's role was only to collect information.

Morsi is thought likely to have reached the decisions with the military top command, which ruled the country between president Hosni Mubarak's ouster in February 2011 and Morsi's inauguration as his successor in June.