* Officials say hundreds of soldiers arrive in area
* Israel says Egypt acting with "determination"
* Targeting "haphazard", residents say
* Local villagers sceptical about military operation
Egypt poured troops into North Sinai on Thursday in an offensive meant to tackle militants in the Israeli border region, but residents were sceptical, saying they had seen no sign of anyone being killed in what they described as a "haphazard" operation.
The offensive is crucial to maintaining good relations with Israel, which fears Islamist militants based in the increasingly lawless desert region could link up with hardliners in neighbouring Gaza to launch attacks on the Jewish state - potentially threatening a 1979 peace treaty with Egypt.
Army commanders said as many as 20 "terrorists" had died in the offensive launched after suspected Islamist militants killed 16 Egyptian border guards on Sunday and drove a stolen armoured car into Israel which was then destroyed by Israeli forces.
Hundreds of troops and dozens of military vehicles had reached al-Arish, the main administrative centre in North Sinai, security sources said on Thursday.
Armoured vehicles, some equipped with machineguns, could then be seen driving out of al-Arish towards the border settlement of Sheikh Zuwaid - which had been targeted by aircraft on Wednesday. The troops saluted passersby and flashed victory signs, or filmed their departure with video cameras.
But residents interviewed later in Shaikh Zuwaid and surrounding villages said they had seen no sign of fighting.
In al Toumah, a village surrounded by olive fields, one witness said he saw troops firing in the air.
"We thought they were chasing someone, but their arms were directed up and we didn't see who they were fighting with," the witness, who declined to be named, said. "We couldn't find any bodies or signs of battle after they left."
In Shaikh Zuwaid, controlled by Bedouin tribal leaders since police deserted the area last year, life continued as normal, its markets bustling. Witnesses reported a military presence on the outskirts, but no fighting since Wednesday's air strikes.
CHALLENGE FOR NEW PRESIDENT
Lawlessness has been growing in North Sinai, a region awash with guns and bristling with resentment against Cairo, since the overthrow of Hosni Mubarak in February last year.
Egyptian President Mohamed Mursi, elected in June, has vowed to restore stability in what the military has billed the biggest offensive in the region since Egypt's 1973 war with Israel.
He has also brushed aside accusations that his background in the Muslim Brotherhood, and ideological affinity with the Islamist Hamas rulers in Gaza, might lead him to take a softer line on militants bent on the destruction of Israel.
Israel has welcomed Egypt's offensive while continuing to express worries about the deteriorating situation in Sinai, home to anti-Israel militants, Bedouin tribes angered by neglect by Cairo, gun-runners, drug smugglers and al Qaeda sympathisers.
Israeli Defence Minister Ehud Barak said Egypt was acting "to an extent and with a determination that I cannot previously recall".
"Whether this ends with (their) regained control of Sinai and allows us not to worry as much as we have in the past few months, this I do not know," he told Israel Radio.
In the region itself, all signs pointed to problems ahead.
In al-Arish, gunmen fired shots towards a police station early on Thursday before running off. That followed attacks on checkpoints in the town on Wednesday.
In al Toumah village, residents said troops had searched fields and raided one house, finding nothing.
Some residents complained the army's limited actions so far - including Wednesday's air strikes - seemed indiscriminate.
"We are not against attacking militants, but the pilots have to set their targets properly because we have been subjected to haphazard bombardment which led to the destruction of homes and cars," said Mohamed Aqil in al-Goura village near Sheikh Zuwaid.
"They said they killed 20 militants, where are they? Show them to us," said one resident at al Goura.
INTELLIGENCE CHIEF SACKED
Mursi on Wednesday fired the region's governor and Egypt's intelligence chief in response to public anger over the deaths of the 16 border guards, the deadliest assault on Egyptian security forces in northern Sinai since the 1973 war.
No one has claimed responsibility for the assault which happened during the evening "iftar" meal which breaks the daytime fast during the Muslim holy month of Ramadan.
But with wide respect in Egypt for rank-and-file soldiers who are often poorly paid conscripts posted far from their families, public anger has focused on outgoing intelligence chief Mourad Mwafi.
Media outlets had quoted him as saying Egypt had been aware of a threat before the attack "but we never imagined that a Muslim would kill his Muslim brother at iftar", he said.
Israel says militants based in Sinai and Palestinian hardliners in neighbouring Gaza pose a growing threat to its border. It says Palestinians use illegal tunnels to smuggle in guns and travel across to join those on the Egyptian side.
Egypt began work to block the tunnels on Wednesday. It has also closed the Rafah border crossing, drawing an appeal from Ismail Nahiyeh, the head of the Hamas government, to reopen what he called "lifeline" for Gaza.
Residents in al-Arish welcomed the security sweep, seeing it as an opportunity to curb criminality among Bedouin, including those in Sheikh Zuwaid, where many make a living smuggling goods and people through more than 1,000 tunnels into Gaza.
"We want the army to return to the border," said 45-year-old shopkeeper Hassan Mohamed. "The tunnels have destroyed the lives of people in al-Arish. We want them to hit the Bedouin hard."