Two Egyptian soldiers were killed in an exchange of fire with smugglers near the border with Israel on Wednesday, an Israeli army spokeswoman said.
"During a skirmish at about 1800 GMT in Egyptian territory near the Israeli town of Haluza, two Egyptian soldiers were found dead in an exchange of fire with smugglers seeking to enter into Israel," spokeswoman Avital Leibovitz told reporters.
Four hundred metres (yards) to the south, and some 45 minutes later a second gang of smugglers managed to get through Israeli security barriers prompting Israeli soldiers to open fire, wounding one, she added.
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"At no time did the Israeli army fire in the direction of Egyptian forces," she stressed.
The desert border between Israel and Egypt runs for 240 kilometres (150 miles) from the Red Sea seaside town of Eilat to Kerem Shalom in the north.
Sinai desert Bedouin tribesmen run arms, cigarettes, and drugs smuggling rackets across the porous border.
Israel plans to complete by the end of next year a five metre high security barrier along the border.