Attackers placed the bomb at the outer fence of the police station in Sheikh Zuwayed, the source told Egypt's publicly funded news agency.
Meanwhile, heavy gunfire was reported Monday in ongoing clashes between security forces and militants in Sinai's market area, the news agency said. No injuries were reported.
Militants opened fire on a police station, the central prison and the traffic administration office in the nearby city of Arish late Monday.
On Saturday, militants and troops clashed in Sheikh Zuwayed.