Residents of Nagaa Shabana in North Sinai's Rafah discovered a young man's severed head on Friday.
The 23-year-old victim was kidnapped on Thursday near his house by armed men driving an SUV, according to witness accounts.
The police are currently working in coordination with the tribesmen to identify the perpetrators, security sources said, adding that the severed head has been placed in the hospital's mortuary refrigerator.
Sinai residents have found four beheaded bodies last week. Ansar Bait al-Maqdis, a Sinai-based militant group, claimed responsibility of the execution, accusing the deceased of providing intelligence to Israel in a video aired on Thursday.
The group has also warned inhabitants of Sinai against "cooperating with the Jews and spying on their fellow Muslims", urging those involved to repent and they will be pardoned.
Ansar Bait al-Maqdis is a militant group that has claimed responsibility for killing dozens of policemen, army soldiers, and tourists after former President Mohamed Mursi had been deposed last July.
This content is from Aswat Masriya