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The gunman fired shots indiscriminately leading to the death of two Israeli tourists. Illustrative image. Image Credit: Shutterstock

Two Israeli tourists and one Egyptian were killed Sunday by a policeman in Egypt, local media and Israeli authorities said, as war rages for a second day between the neighbouring country and Hamas.

The policeman fired "at random" at an Israeli tour group visiting Alexandria using "his personal weapon", the state-affiliated private television Extra News said quoting a security source.

A fourth person was wounded and the policeman was "immediately arrested", it added.

The Israeli foreign ministry confirmed the deaths in a statement.

"This morning during a visit of Israeli tourists in Alexandria, Egypt, a local opened fire at them, murdering two Israeli citizens and their Egyptian guide," it reads.

"In addition, there is a wounded Israeli in moderate condition."

The deaths come as fighting rages after Palestinian militants on Saturday launched a multi-pronged attack on Israel, which has declared war on Hamas and launched air strikes on Gaza.

Egypt was the first Arab country to forge a peace deal with Israel in 1979, and has long served as a key intermediary between Israel and the Palestinians.

However, despite the diplomatic relations, Israel remains largely unpopular among Egyptians.

In June, three Israeli soldiers were killed in a firefight at the border with Egypt by a member of the Egyptian security forces who crossed the border "in pursuit of drug traffickers", according to the Egyptian army.

On Saturday, Egyptian President Abdel Fattah Al Sissi warned of a "vicious cycle of tensions threatening regional stability and security".