Egyptian forces on Tuesday raided homes in search of suspects in an attack that killed 16 soldiers on the border with Israel and prepared to close smuggling tunnels to Gaza, security officials said.

The crackdown was launched as the military held a funeral for the soldiers killed when more than 30 militants attacked a border guard post under the cover of mortar fire and commandeered a military vehicle into Israel.

Officials said soldiers and police raided several homes near the north Sinai town of El-Arish in search of known Islamist extremists who might be linked to Sunday´s attack, the deadliest of its kind decades.

Israel handed over to Egypt six "completely charred" bodies that were in the armoured personnel carrier that was driven into Israel where it was destroyed in a helicopter strike, said a medical official in El-Arish.

The source said one of the bodies was "probably that of the soldier who was forced to drive the vehicle." The militants had also used an explosives-laden truck that blew up at a border post.

Meanwhile, an AFP correspondent saw large trucks loaded with bulldozers headed to Rafah, the town on the border with the Gaza Strip that sits atop a honeycomb of smuggling tunnels.

"There are preparations to close the tunnels," a security official said.

At the military funeral in Cairo, attended by Defence Minister Field Marshal Hussein Tantawi and senior government officials, only 15 caskets, wrapped in the military flag, could be seen.

"Every Egyptian feels this attack was directed against them. They all want vengeance, and there must be blood for blood," a presenter said during a live broadcast of the funeral on state television.

Sunday´s attack highlighted the government´s tenuous grip on the Sinai Peninsula, from where Islamist militants have launched several rocket attacks on Israel and a deadly cross border raid last year. The most recent attack presents a challenge to Egypt´s new Islamist President Mohamed Morsi, whose Muslim Brotherhood has good relations with the Hamas rulers of the Gaza Strip.

Morsi did not attend the funeral, where some protesters chanted slogans against the Muslim Brotherhood, and according to witnesses, tried to assault the Islamist Prime Minister Hisham Qandil.

His spokesman said in a statement that Morsi did not attend because the security measures needed to guard the president would have impinged on the "popular character" of the ceremony.

On Tuesday, Morsi visited soldiers wounded in the attack and hospitalised in Cairo, the official MENA news agency reported.

Morsi has received both Hamas´s chief and its prime minister in Gaza, Ismail Haniya, in visits, along with Palestinian president Mahmud Abbas, and his government has eased border restrictions on Gaza.

Egypt closed until further notice its Rafah crossing with the Gaza Strip, the Palestinian territory´s only access to the outside world that is not controlled by Israel.

The enclave has been under a semi-blockade by Israel since Hamas seized it in 2007.

After president Hosni Mubarak´s ouster in February 2011, militants stepped up attacks in Sinai, prompting the military, then in charge of the country, to send reinforcements to the peninsula.

The Israeli army said in a statement that the Kerem Shalom crossing, which lies on the border of Israel, Egypt and Gaza and where the gunmen breached the fence, had been reopened on Tuesday morning. (Copyright © 2012 Agence France Presse. 08/07/12)