The air strikes on Tumah village -- the military's first in Sinai for decades -- were carried out 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, who spoke to on condition of anonymity, said "20 terrorists were killed" in Apache helicopter air strikes and when soldiers from the 2nd Infantry Division stormed Tumah.
"The operation is continuing," he said. Other security officials in the north of the peninsula reported air strikes near the town of Sheikh Zuwayid, close to the village.
But the official news MENA news agency gave a conflicting account of how the militants were killed.
"Terrorist elements fired rockets and shells and heavy machine guns... at the aircraft combing the area, but did not hit the aircraft, and ground forces then dealt with them and killed a number of them," the agency reported.
Overnight, unknown assailants attacked four security checkpoints near the town of El-Arish, security officials said.
The interior ministry said three policemen were wounded.
The air strikes, according to AFP, came a day after the military held a funeral for the 16 soldiers who died in Sunday's attack by militants amid widespread calls for vengeance
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