Egypt has deployed extra troops, tanks and other armoured vehicles to the Sinai peninsula in an escalation of its military offensive in the area. The reinforcements follow the killing of 16 border guards by suspected Islamist militants on Sunday. The army has also begun sealing off tunnels into Gaza, according to Egypt's Mena news agency. Earlier reports that fresh fighting had broken out in al-Arish have been denied by a source quoted by the agency. According to Nile News TV, violent clashes had broken out between police and armed men outside a police station in the town. At least a dozen military transporters, each carrying two armoured personnel carriers, passed us on the main coastal road in al-Arish. We watched as they unloaded at the main military base here. Sights like this have not been seen in the Sinai Peninsula since Egypt's 1973 war with Israel and a small crowd of locals stood by staring. One man told us he hoped the army would come down hard on Islamist militants, describing the killing of 16 Egyptian border guards last weekend as "heinous". Others in al-Arish have expressed more cautious opinions, pointing out that in the past there has been a heavy-handed approach from security forces when dealing with the local Bedouin population. Tensions are likely to rise as action is taken to destroy the smuggling tunnels between Egypt and the Gaza Strip. There are said to be hundreds of them used mainly to transfer fuel and goods into Gaza, but sometimes to move weapons and people illegally. After years with little economic development, many North Sinai residents rely on the tunnels trade. But a security source told Mena the shots had been fired into the air by a man driving an unlicensed car. Violence in the region began on Sunday, when militants carried out the deadliest and most brazen attack against Egyptian troops in the Sinai region for decades. There were further attacks on checkpoints in al-Arish on Wednesday, which left a number of people wounded. Egypt launched its military offensive hours later, launching missile strikes from helicopters. According to military officials, 20 people were killed in the village of Touma, while the Sheikh Zuwaid area to the west was also hit. Egypt's military presence in Sinai is limited and requires Israeli approval under the terms of the 1979 peace treaty which returned Sinai to Egyptian control. Analysts say that the security situation in the area has deteriorated following the fall of Hosni Mubarak last year, and that Islamist extremists appear to have gained a foothold. There are more than 1,200 illegal tunnels along the Egypt-Gaza border that are used for smuggling people and goods, Mena reports. The militants who launched Sunday's attacks are believed to have used them as an escape route.