The source of the strike was not immediately clear. Some sources spoke of an Israeli air strike conducted from Israeli air space and others credited the Egyptian military.
Witnesses said at least five members of a cell led by local Islamist militants were killed in the raid.
Egypt's army said two explosions were heard at around 4:15 pm (1415 GMT) in the Al-Ojra area, three kilometres (around 1.8 miles) from the border with Israel.
Witnesses said Egyptian military helicopters hovered above the site after the blasts.
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Israel's military yesterday ordered the cancellation of all flights in and out of the Red Sea resort of Eilat, which borders Egypt, due to what is said was a security threat.
Last month, Israel deployed a battery of its Iron Dome missile defence system near Eilat, which has been a target of attacks in the past.
In April the town was struck by rocket fire from the Sinai, and debris from a rocket that hit northern Eilat on July 4 was found days later.