Egypt's Interior Ministry says a suicide bomber killed two police officers and wounded three more while he was being pursued near Cairo's famed Khan el-Khalili tourist marketplace.

The Monday night explosion in the Gamaliya district was a rarity for a central area of the capital, after progress from a security crackdown under President Abdel-Fattah el-Sissi.

A body was seen on the street behind areas cordoned off by dozens of police and soldiers after the explosion, which shattered windows and blew curtains off nearby balconies. Egypt's renowned Al-Azhar mosque is nearby.

Egypt is facing an Islamic State-led insurgency that is largely limited to the northern Sinai but which occasionally spills out to the mainland.