Militants who have sworn allegiance to ISIL said on Thursday that they attacked an Egyptian naval ship in the Mediterranean near the coast of Israel and the Gaza Strip.
Pictures posted online by the group Sinai Province purport to show a missile or rocket attack and explosion on the vessel.
Egypt’s military says a coastguard ship was set ablaze after a fire fight but denied claims there was any loss of life.
A Reuters witness in Gaza saw a plume of dark grey smoke rising from a boat off the coast. Other witnesses in the Palestinian enclave said they heard explosions and gunfire.
Military sources said the suspected militants had fled after firing on the vessel.
Such incidents at sea are rare, although Egypt is battling an increasingly brazen Islamist insurgency in the Sinai with militants targeting mainly soldiers and police.
Hundreds have been killed since the army toppled Islamist President Mohamed Mursi in 2013 after mass protests against his rule.