CAIRO, Nov 18 (Reuters) - Three people were killed and 12 injured in a firefight between soldiers and armed residents over a disputed island in the Nile west of Egypt's capital Cairo, a security source said.

An army statement said the authorities were clearing the island, which the army says it owns and is a centrepoint for its operations to keep Cairo secure, after armed-residents raided it on Friday night forcing guards out.

Residents exchanged fire with security forces from buildings overlooking the island, at Giza, injuring four soldiers.

Many cases of illegal building on or usage of land owned by the government took place in the security vacuum following the popular uprising that toppled Hosni Mubarak last year. A new Islamist-led government is trying to restore order.

Such campaigns to remove residents claiming land rights are often carried out by police, and have been met with resistance. However, incidents of firing at soldiers are very rare.

Twenty five locals were arrested by the army. Their families have blocked a main road adjacent to the Nile demanding their release. (Reporting by Tamim Elyan; Editing by Alison Williams)