Militants fired a mortar missile targeting army forces, who were in a security campaign in el-Gora village in North Sinai, security officials said.
However, the missile missed the soldiers and fell on the house killing four children, they said.
The children were aged between 10-12 years, local media reports said.
The military has launched frequent security raids in the area, has arrested suspects, and demolished houses that it says are a hub of "terrorist" activity, as many policemen and soldiers have been killed in the attacks by militants.
Militants have stepped up their attacks since last year after the military overthrew Islamist president Mohammed Morsi.
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