A Swedish man who identified himself as the father of one of the victims, 27-year-old Sammie Olovsson, said they were sitting in the hotel restaurant when the assailants burst in and stabbed his son.

"My son and me were eating in the restaurant and having a discussion," he told AFP in the Hurghada hospital.

The two men rushed into the restaurant "very fast," he said. "They took knives and they tried to get Sammie here," he said, pointing to his chest.

"Then (they) said 'down on the floor' and we did that," he said, adding that he told his son, who was bleeding, not to move.

"I got up two times and they stayed there with the guns. When I got up later on they were not here," he said.

On its Facebook page, the hotel posted pictures of the two other victims, spelled in hospital records as Renata Weisslen and Wilhem Weislan, both smiling.

"They are ok now," it said in a post. A doctor at the hospital told AFP they were a couple, both 72.

Zazou told AFP that the two attackers were "not part of an organisation".

It was "an individually motivated attack. This is the initial finding," said Zazou, who was in Hurghada to visit the victims, adding that the investigation was still ongoing.

A video published by Egyptian news websites appeared to show the wounded assailant receiving emergency medical treatment and being questioned on his identity.

He appears to have been shot in both legs.

Zazou described the assailants as "amateurish" and said their motive was not yet clear.

On its Facebook page, the hotel said that "two drugged young men" attacked the restaurant with a "fake gun" and "small knives".

But a worker at the restaurant, who requested anonymity, told AFP that one of the two men shouted "there is no god but God" on entering, and carried a black banner that resembled the Islamic State in Iraq and Syria (ISIS) group flag.

"The door opened and there was a man holding a knife and a black cloth with the (ISIS group) flag on it," he said. Another held what appeared to be a gun.

"One of them said: 'There is no god but God. We will blow up this place'. The first attacked customers sitting at a table, with a knife."

The incident further threatened efforts to repair the country's damaged tourism industry, coming a day after a Cairo hotel hosting Israeli tourists came under attack by men who hurled fireworks and fired birdshot.

ISIS claimed credit for that attack, which it said targeted "Jewish" tourists.

Police said they were Arab-Israeli tourists, and the assailants had targeted policemen outside the hotel and not the tourists.

The extremist group's Egypt affiliate is waging an insurgency in the Sinai Peninsula, and dealt a body blow to the country's tourism industry by claiming to have downed a Russian airliner in October, killing all the holidaymakers on board.

The attack prompted Russia to suspend flights to and from Egypt, while Britain restricted flights to the Sharm el-Sheikh resort from where the doomed plane had departed.

After the Russian plane tragedy, some major tourist operators suspended packages to Sharm el-Sheikh and Hurghada.

The resorts, which Egypt promoted as jewels of its tourism industry, had previously attracted millions of holidaymakers, including Russians, Britons and Italians, and are famed for their pristine beaches and scuba diving.

The country's tourism industry was dealt several heavy blows in 2015.

In September, eight Mexican tourists were mistakenly killed by Egyptian security forces in the vast Western Desert.

In June, police foiled an attempted suicide bomb attack near the famed Karnak temple in Luxor - one of Egypt's most popular heritage attractions - when 600 tourists were inside.

Nine Egyptians were sentenced in November to life in prison for their involvement in the failed attack, while two others were jailed for seven years.