CAIRO, Nov 3 (Aswat Masriya) – Millions of Egyptian pounds will be allocated as compensation for Sinai residents currently being evicted to create a border zone in the Peninsula, President Abdel Fattah al-Sisi asserted on Monday.

Speaking during a military event, Sisi added that compensation for some Sinai residents could reach a sum of one billion Egyptian pounds, reported state-run news agency MENA.

Security forces began evacuating the area bordering Sinai's Rafah on Tuesday evening, as one of the steps taken in response to a militant attack on security personnel in the Peninsula on October 24 which left over 33 killed.

Egypt's cabinet issued on Wednesday a decision to clear 500 metres of the border area with Gaza of civilians, vowing to provide compensation for those evicted. 

The decision allows the forcible seizure of the property of those who refuse to comply. It also excludes those who shelter tunnels under their houses from entitlement to compensation.

"When the people of Sinai leave their houses, they must be properly compensated," MENA reported Sisi as saying. "We will never forget this sacrifice they've made."

The president addressed the development of the Sinai Peninsula, describing it as a "priority". He added that the state will work on developing the Peninsula even before it is "fully secure."

North Sinai's Governor Abdel Fattah Harhour told state-run news agency MENA on Thursday night that 37 families who evacuated their houses have received financial compensation. He added that the government has allocated 500 million Egyptian pounds for financial compensation for those whose houses have been evicted.

According to a surveillance of the area in question, there are 802 houses sheltering 1156 families which need to be evicted. They include 112 houses which have been affected by the tunnel-destruction operations the armed forces are conducting and 87 more which have already been removed for sheltering illegal tunnels.

President Abdel Fattah al-Sisi declared a three-month state of emergency and a nighttime curfew in parts of the Sinai Peninsula in response to the deadly attacks. 

Gaza's ruling body Hamas criticised the buffer zone in a statement last week, saying it would reinforce the siege imposed on the strip since 2007. 

Militants have stepped up attacks targeting security forces in Egypt, particularly in the Sinai Peninsula, since the army's ouster of Islamist President Mohamed Mursi in July 2013, which followed mass protests against his rule. 

Security forces have been targeting tunnels dug up in the Sinai to connect it with Gaza. Egyptian authorities say the tunnels are used to smuggle arms to militants in the Peninsula.