Three days of mourning has been declared after Islamist militants killed more than 230 people at a mosque in Egypt’s North Sinai, detonating a bomb and gunning down worshippers in the deadliest attack in the country’s modern history.

State media reports about 40 gunmen set up positions outside the Al Rawdah mosque in Bir al-Abed in the country’s North Sinai on Friday and opened fire from different locations.

“They were shooting at people as they left the mosque,” said a local resident whose relatives were at the scene.

“They were shooting at the ambulances too.”

As worshippers were leaving the mosque, a bomb was also detonated.

The public prosecutors’ office said in a statement 235 people had been killed and 109 more wounded.

Worshippers were finishing prayers at the mosque when a bomb exploded. Photo: AAP

Prime Minister Malcolm Turnbull condemned the “appalling and barbaric” terrorist attack.

“We send our condolences to the families of the victims and wish a speedy recovery for the injured,” Mr Turnbull wrote on Twitter on Saturday.

“We are resolute in our determination to defeat Islamist terrorism & keep Australians safe.”

The Australian Embassy in Cairo has been advised by Egyptian authorities that no Australians are known to have been affected by the attack.

No group immediately claimed responsibility, but since 2013 Egyptian security forces have battled a stubborn Islamic State affiliate in the mainly desert region, and militants have killed hundreds of police and soldiers.

President Abdel Fattah al-Sisi, who presents himself as a bulwark against Islamist militancy, convened an emergency meeting with his defence and interior ministers and intelligence chief.

Security has long been one of the key sources of public support for the former general, who is expected to run for re-election early next year for another four-year term.

He promised the attack “would not go unpunished”.

US President Donald Trump called the assault a “horrible and cowardly terrorist attack”.

He said he would be calling the President of Egypt on Saturday to discuss the terror attack.

“We have to get TOUGHER AND SMARTER than ever before, and we will. Need the WALL, need the BAN! God bless the people of Egypt,” he tweeted early on Saturday.

Will be calling the President of Egypt in a short while to discuss the tragic terrorist attack, with so much loss of life. We have to get TOUGHER AND SMARTER than ever before, and we will. Need the WALL, need the BAN! God bless the people of Egypt.

— Donald J. Trump (@realDonaldTrump) November 24, 2017

Mr Trump earlier tweeted “the world cannot tolerate terrorism”.

Horrible and cowardly terrorist attack on innocent and defenseless worshipers in Egypt. The world cannot tolerate terrorism, we must defeat them militarily and discredit the extremist ideology that forms the basis of their existence!

— Donald J. Trump (@realDonaldTrump) November 24, 2017

The Arabiya news channel and some local sources said some of the worshippers were Sufis, whom groups such as Islamic State consider targets because they revere saints and shrines, which for Islamists is tantamount to idolatry.

The jihadists have also attacked local tribes and their militias for working with the army and police, branding them traitors.

The Sinai branch is one of Islamic State’s surviving branches following the collapse of its self-declared caliphate in Syria and Iraq after military defeats by US-backed forces.

Striking at a mosque would be a change in tactics for the Sinai militants, who have usually attacked troops and police and Christian churches.

North Sinai, which stretches from the Suez Canal eastwards to the Gaza Strip and Israel, has long been a security headache for Egyptian security forces because of smuggling.

Bloodshed in the Sinai worsened after 2013 when President Sisi led the overthrow of President Mohamed Mursi of the Muslim Brotherhood.

—with AAP