An Egyptian intelligence official says armed militants have taken 25 Chinese factory workers hostage in the northern Sinai Peninsula.

He says a group of armed men belonging to an al-Qaida inspired group attacked a bus taking the Chinese workers home. He said on Tuesday that the armed men forced the workers off the bus, loaded them into cars and took them hostage.

The group is demanding release of militants jailed for a 2005 bombing in Sharm el-Sheikh at the tip of the Egyptian Sinai.

The official spoke on condition of anonymity because he was not authorized to speak to reporters.