It detonated when police used water cannon to try to defuse it, injuring two policemen and two hotel security guards.
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The military launched a major offensive against the terrorists in September, claiming it killed scores in an attempt to restore order in the peninsula which borders Israel and the Gaza Strip.
The north of the peninsula, where security forces are fighting an Islamist insurgency, is a bastion of the Egyptian affiliate of the jihadist Islamic State (IS) group.
Egypt’s Sinai has witnessed a wave of violence since the ouster of former President Mohamed Morsi, where jihadists and Egyptian security forces are entrenched in a lengthy and bloody battle.
Unidentified gunmen shot and killed Mostafa Abdel Rahman, a high-ranking official and parliamentary candidate from the Salafist Al-Nour Party, in North Sinai’s El-Arish on Saturday.
Meanwhile, in a separate incident on Saturday, three police officers were killed and eight wounded in a bomb attack in Arish.
Police officials say they believe the gunmen targeted the candidate to undermine the elections.
Egypt has killed over 600 militants and arrested hundreds of others in recent operations in North Sinai as part of the country’s “war against terrorism” declared by President Abdel-Fattah al-Sisi.
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Morsi’s Muslim Brotherhood won most seats, followed by the Nur party, creating an Islamist-dominated parliament eventually disbanded by a court order in 2012.
