At least 109 others were injured in the blast, which occurred in the city’s Al-Rawda neighborhood.
After detonating the bomb, a group of attackers opened fire on worshippers and then attempted to stop ambulances from accessing the area, according to Egypt's Nile News television channel.
Egyptian President Abdel-Fattah al-Sisi reportedly plans to hold an emergency meeting of the government’s Security Committee later this evening to mull a response to the deadly attack, Egypt’s Middle East News Agency quoted an unnamed security official as saying.
The meeting, the source added, would also be attended by the ministers of defense and interior and the head of Egypt’s General Intelligence Directorate.
No group has yet claimed responsibility for the bombing.
The Egyptian presidency, meanwhile, has declared a three-day countrywide state of mourning for the victims.
The Sinai Peninsula has remained the epicenter of a low-intensity militant insurgency since mid-2013, when the army ousted and imprisoned Mohamed Morsi, Egypt’s first freely elected president, in a bloody military coup.
The insurgency has been largely confined to the northern Sinai Peninsula, but sporadic attacks have also occurred on the Egyptian mainland, including capital Cairo.