Gunmen who attacked a mosque in North Sinai were carrying an Islamic State flag, Egyptian officials says, as the state news agency reported the death toll had risen to 305, including 27 children.
Egypt's military said they had carried out air strikes and raids overnight against militants held responsible for the killings, the bloodiest attack in Egypt's modern history.
The attack also left 128 people injured, the MENA state news agency reported, while Egypt's public prosecutor's office linked it to Islamic State militants, also known as Daesh.
"They numbered between 25 and 30, carrying the Daesh flag and took up positions in front of the mosque door and its 12 windows with automatic rifles," the prosecutor said in a statement.
The gunmen, some wearing masks and military-style uniforms, surrounded the mosque blocking windows and a doorway and opened fire inside with automatic rifles, the statement said, citing their investigation and interviews with wounded survivors.
No group has claimed responsibility, but Egyptian forces are battling a stubborn Islamic State affiliate in the region, one of the surviving branches of the militant group after it suffered defeats by US-backed forces in Iraq and Syria.
"The air force has over the past few hours eliminated a number of outposts used by terrorist elements," the army said.
Witnesses say gunmen set off a bomb at the end of Friday prayers at the Al Rawdah mosque in Bir al-Abed, west of El-Arish city, and then opened fire as worshippers tried to flee, shooting at ambulances and setting fire to cars to block roads.
Images on state media showed bloodied victims and bodies covered in blankets inside the mosque.
Striking a mosque would be a shift in tactics for the Sinai militants, who have previously attacked troops and police and more recently tried to spread their insurgency to the mainland by hitting Christian churches and pilgrims.
The massive casualties in the Sinai attack and the targeting of a mosque stunned Egyptians who have struggled through instability after the 2011 uprising ousted long-standing leader Hosni Mubarak, and the years of protests that followed.
Condemnation from New Zealand
Deputy Prime Minister Winston Peters has joined others in condemning the attack.
There is no indication of any New Zealand casualties, Mr Peters says.
"New Zealand strongly condemns this cowardly attack on innocent people at prayer and conveys its condolences to the government of Egypt and the families and loved ones of those affected."
New Zealand's travel advisory to the area warns of an extreme risk due to the threat of terrorism, kidnapping and the presence of armed groups.
Australian Prime Minister Malcolm Turnbull condemned the attack as "appalling and barbaric".
The Australian Embassy in Cairo had been advised by Egyptian authorities that no Australians are known to have been affected by the attack.
Reuters / NZN / Newshub.