Egyptian police and military opened fire on four SUVs of a tourist group, leaving 12 dead and 10 injured, the Ministry of the Interior announced on Monday.
The official statement said: "While police and army forces were pursuing terrorists in the oasis of the Western Desert, four SUV vehicles were accidentally dealt and turned out to be of a Mexican tourism group which was present in a restricted area. The incident resulted in the death of 12 and the injury of 10 other Mexicans and Egyptians who have been transferred to hospitals. A team has been formed to look into the incident and the reasons why tourists entered a restricted area."
In a separate statement, the Mexican government confirmed two Mexican nationals were among the dead. Authorities were working to release their identities.
Five Mexicans were among the injured, and they were in stable condition, the statement said.
Mexican President Enrique Peña Nieto condemned the acts and called for a full investigation.
A local safari trip guide who goes by the nickname Ragab Safari told BuzzFeed News that there had been clashes between security forces and terrorists after "terrorists kidnapped one of the local intelligence officer leads who used to worked with the army last week."
Ragab added that the tourist convoy of four SUVs was passing through the area when the drivers panicked and decided to hide behind the sand dunes. He said that an Apache helicopter spotted them there and may have mistaken them as armed Bedouins trying to trap the security forces. "So, they started shooting at the cars," he said.
The story of the local guide runs in line with the statement that ISIS released online saying there were clashes with Egyptian army in the western desert on Sunday. The statement also showed a photo of a decapitated guy who they described as "the spy for the Egyptian army Saleh Kassem."
The killings will likely further damage a tourism industry that has suffered tremendously in the years of instability that followed the 2011 uprising that toppled longtime president, Hosni Mubarak. Egypt has been struggling to encourage tourists to return to its magnificent archeological sites and sun-soaked beaches in order provide jobs and increase its hard currency reserves.
The incident also raises uncomfortable questions for the military about what human rights groups inside and outside Egypt have criticized as scorched-earth tactics in the country's war against jihadi militants.
The Egyptian Ministry of Tourism, in an official statement, insisted that the convoy lacked proper permits and was present in a forbidden area.
Many were also stunned at the seeming insensitivity of Egyptian officials who quickly appeared to blame the tourists for being in an "unapproved" area instead of offering condolences to the victims and assurances to other potential tourists.
But an owner of a tourist company in the area, who asked not to be named for safety reasons, denied the official account entirely. "The guides working with the group had permits issued by the police," he told BuzzFeed News in an interview via phone. "The convoy never entered a forbidden area because the area of terrorist stronghold is far from where the incident happened."
BuzzFeed News tried to reach the injured, who are reportedly being treated at the Dar-al-fouad hospital, but police said visits and communication are prohibited at the moment.