CAIRO

Egypt's Islamic State affiliate said on Thursday (July 16) it fired a rocket at an Egyptian naval vessel in the Mediterranean Sea near the coast of Israel and the Gaza Strip.

The militant group Sinai Province has focused mainly on attacking Egyptian soldiers and police in the Sinai peninsula, killing hundreds since the army toppled Islamist President Mohamed Mursi in 2013 after mass protests against his rule.

Photographs distributed online by the group appeared to show a rocket heading towards a ship and setting it ablaze on impact. Reuters could not verify the militants' version of events.

The Egyptian military said in a statement that a coastguard launch had exchanged shots with "terrorist elements", causing the vessel to catch fire. It said there was no loss of life.

Such incidents at sea are rare, though Egypt is battling an increasingly brazen Islamist insurgency in the Sinai that lies between Israel, the Gaza Strip and the Suez Canal.

President Abdel Fattah Al-Sisi has said militancy poses an existential threat to Egypt, the most populous Arab country.

As army chief, Sisi overthrew Mursi and then launched a crackdown on Islamists, which has weakened his foes in the mainstream Muslim Brotherhood movement but failed to neutralise Sinai-based militants.

Sinai Province, the most lethal militant group in Egypt, last year pledged loyalty to Islamic State, which controls large tracts of territory in Syria and Iraq and has a presence in Egypt's neighbour Libya.

It has recently carried out high profile attacks, which prompted the drafting of a sweeping counter-terrorism law.

On July 1, 100 militants and at least 17 members of the security forces were killed in a single day of clashes and attacks claimed by Sinai Province, authorities said.

The car bomb assassination of Egypt's top prosecutor in Cairo last month has also raised concerns that the insurgency is spreading.

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.

Later in the day a small bomb exploded in a residential area of the upscale Cairo neighbourhood of Heliopolis, wounding a police officer, security sources said.

State television, meanwhile, announced the resignation of the Cairo police chief. It did not elaborate. - Reuters