Three Israeli soldiers were killed in a rare shooting on the Egyptian border Saturday, triggering a manhunt that saw one "assailant" killed inside Israel.

"Three (Israeli) soldiers, two men and a woman, were killed by live fire adjacent to the border," an army statement said.

The army had initially declined to confirm the deaths, which were reported by Israeli media, while families were notified.

Separately, the army said troops had shot dead an assailant in Israeli territory near the border.

"During a confrontation with an assailant in Israeli territory a short while ago... soldiers responded with live fire and neutralised the assailant," an army statement said.

An army spokesman confirmed the attacker had been killed. "Soldiers continue searching the area," he said, declining to elaborate.

Egypt was the first Arab country to make peace with Israel following the Camp David accords of 1978 and the border is largely peaceful, although drug smugglers have occasionally exchanged fire with Israeli troops.