The military said it was monitoring two vehicles near a Coptic Orthodox Church in Rafah. One vehicle seized by the military contained ammunition, RPGs and automatic weapons, the Egyptian Independent newspaper reports.
The military said it believed the suspects, who fled, were plotting an attack on the church during religious celebrations. The Egyptian report added that Coptic families in the region asked for more security in the region in preparation for the Coptic Christmas, which was Monday.
Nearly two dozen members of the Coptic community were killed in an attack on a church in Alexandria in January 2011. Monday's Christmas celebration marks the first for the Coptic community under an Egyptian government dominated by Islamist political groups.
Last week, security sources in Egypt confirmed to al-Arabiya that a cache of anti-tank missiles was discovered in a warehouse near the Israeli border. Among the weapons were six U.S.-made missiles that sources said may have been smuggled into the area from Libya.
Security in the Sinai Peninsula has been problematic for Egypt in the post-revolutionary climate.