Newly elected Egyptian President Mohamed Mursi is flanked by Field Marshal Hussein Tantawi (L) and Egyptian Armed Forces Chief of Staff Sami Anan (R) as he talks to the soldiers at a checkpoint in al-Arish August 10, 2012. [Photo/Agencies]

CAIRO - The Egyptian army has captured six people it regards as "terrorists" in Sinai after an attack on a police station earlier this week that killed 16 border guards near the border with Israel, a military source told state media on Friday.

Egypt sent hundreds of troops and armoured vehicles into North Sinai on Thursday to tackle militants operating near the border in an offensive commanders said had killed up to 20 people they deemed terrorists.

The action, which Cairo says is its biggest military operation in the desert region since its 1973 war with Israel, is seen as crucial to maintaining stable relations between the former foes who signed a peace treaty in 1979.

Israel fears Islamist militants based in the increasingly lawless region could link up with Palestinian jihadis in the neighbouring Gaza Strip to launch attacks on the Jewish state - potentially jeopardising the peace accord.

The military source told state television that six militants had been captured in the border settlement of Sheikh Zuwaid, where on Wednesday Egyptian warplanes fired rockets at suspected militant hideouts.

Separately, an army official told the al-Ahram state newspaper that preparations were underway to raid the mountainous Jebel El Halal region in Central Sinai in order to purge it of "terrorist" elements.

A Reuters witness said several army tanks were heading towards al-Arish on Friday, the main administrative centre in North Sinai. In the past two days, the witness had only seen armoured vehicles mounted with machine guns in the region.

More army reinforcements, including troops and tanks, had been sent to Arish on Friday, the state newspaper al-Ahram said.

A security source in North Sinai told Reuters that seven and not six men had been detained, but that figure could not be immediately corroborated.

He said the detained men had been previously arrested after bombings in resorts along Sinai's southern Red Sea coast between 2004-2006 that killed or wounded hundreds of foreign tourists. They had been jailed for months, he said, but were freed without charges.

However, some Sinai residents have been sceptical about the army's reported crackdown, saying they had seen no sign of anyone being killed in what they described as a "haphazard" operation.

Disorder has been spreading in North Sinai, a region with many guns that is bristling with resentment over neglect by Cairo, since the overthrow of President Hosni Mubarak in February last year in a popular uprising. Mubarak's government had worked closely with Israel to secure the border region.

Newly elected Egyptian President Mohamed Mursi, who took office in June, has promised to restore stability.

He arrived in al-Arish on Friday to assess the security situation, the state news agency said. It was Mursi's second visit this week to the border area following the attack.

He was accompanied by Defence Minister Field Marshal Hussein Tantawi and Sami Enan, the chief-of-staff of the armed forces, state television said.

Mursi has brushed aside accusations that his background in the Muslim Brotherhood, and ideological affinity with the Islamist Hamas rulers in Gaza, might lead him to take a softer line on militants bent on the destruction of Israel.