Unidentified fighters have killed at least three people and wounded 17 others in North Sinai, security and medical sources have said.

The fighters reportedly fired rocket propelled grenades at a bus carrying factory cement workers in the city of El Arish in the restive Egyptian region.

Military spokesman Colonel Ahmed Aly said in a statement that a "terrorist group" were targeting a police vehicle, but hit the workers' bus by mistake.

"The bus was attacked with a rocket-propelled grenade near El Arish airport. Three people died and 17 were injured in the attack," a security official told the AFP news agency.

A medical source speaking to AFP also confirmed the toll, adding that "many of the injuries are critical".

Sinai, bordering Israel and the besieged Gaza Strip, has been hit by a surge of violence since President Mohamed Morsi's ousting on July 3, with fighters killing a police officer early on Friday.

A Coptic Christian man was found decapitated a day earlier, while two people died in an attack on a checkpoint in the peninsula on Wednesday.

Source: Agencies