The victims are thought to include two policemen, a civilian and a judge. A further eight police officers, two judges and two civilians were injured. A statement has been issued saying three assailants were killed.
A suicide bomber detonated his car, which was "packed with explosives", while police attempted to prevent him from crossing the hotel security, AFP reports. There was then a shootout between the police and another suicide bomber, who attempted to enter the Swiss Inn Al Arish hotel and detonate his belt.
A third person is thought to have entered the hotel and began firing indiscriminately.
The attack happened a day after the first round of a two-month process to elect 596 deputies to the Egyptian Parliament.
The hotel housed a delegation of magistrates to oversee the vote during the parliamentary elections in Egypt.
Islamic State's Egyptian branch have claimed responsibility for the bombing, Reuters reports.
It comes less than a month after a Russian passenger jet was brought down over the Sinai region by what is now thought to have been a bomb. All 224 Russian civilians on board were killed.