Egyptian forces and militants in the Sinai might both be responsible for crimes against humanity, human rights campaigners say.
Human Rights Watch (HRW) accuses the government of carrying out enforced disappearances, killings, torture and other illegal acts.
It says militants who the government is fighting have kidnapped, tortured and murdered hundreds of Sinai residents.
The two sides have long been battling in the northern part of the peninsula.
The government has declared the Northern Sinai a closed military zone, meaning independent reporting is not possible from there.
A military spokesman, Col Tamer al-Rifai, dismissed the HRW report as biased.
“It is based on unverified sources,” he told AFP news agency, adding that “some politicised organisations are intent on tarnishing Egypt’s image and its armed forces with baseless claims”.
Egypt has vowed to wipe out militants in the Sinai, where some are linked to the Islamic State (IS) group.
According to the HRW report, adults and children as young as 12 have been detained and held in secret prisons, sometimes for months at a time.
It documents cases where detainees are said to have been physically abused by soldiers, including beatings and given electric shocks.
Three of those held died from ill-treatment, the report cites former detainees as saying.
It says that since the conflict escalated in 2013, tens of thousands of residents have been forcibly evicted from their homes or have fled because of the fighting.
The report also accuses the government of carrying out possibly illegal air and ground attacks which have killed an undetermined number of civilians.
HRW says militants in Sinai have also carried out criminal abuses, including the kidnap, torture and murder of hundreds of residents. It says hangings and floggings are among punishments meted out as part of legal proceedings which do not correspond to any international standards.
The report identifies the IS-linked Sinai Province group as having committed what it calls “horrific crimes”.
“Some of the abuses carried out by government forces and the militants,” the report says, “are war crimes, and their widespread and systematic nature could amount to crimes against humanity.
“Both war crimes and crimes against humanity are not subject to any statute of limitation, and the latter could be prosecuted before international tribunals.”
Northern Sinai, which is home to about half a million people, became increasingly lawless following the overthrow of President Hosni Mubarak in 2011.
Violence escalated following the ousting of Islamist President Mohammed Morsi two years later, but a large-scale military offensive has so far failed to crush the militants.