Israeli security forces say they thwarted a major terrorist attack, when three suspected militants who infiltrated the border from Egypt were killed by Israeli forces.

A military spokeswoman says heavily armed attackers wearing explosives started shooting as they entered from the Sinai region on Friday in an ambush on Israeli troops who were guarding workers building a border fence between Israel and Egypt.

The spokeswoman says Israeli soldiers returned fire, killing at least two of the attackers. The French News Agency says a third assailant died after detonating an explosive vest.

One Israeli soldier was killed in the incident which took place in the Har Harif region.

Israel says attacks in the region have increased since the 2011 resignation of Egyptian President Hosni Mubarak.

Israeli officials say Gaza-based militants have been taking advantage of lax security in the region to launch attacks on Israel.

In June, gunmen crossed into Israel from Egypt's Sinai desert and killed a construction worker before Israeli troops returned fire, killing two of the attackers.

Israel has begun building a stronger barrier along its 230-kilometer border with Sinai to try to prevent the raids and stop an illegal influx of African migrants.