The crash happened in the city of Luxor on the banks of the river Nile in near to the valley of the Kings.
A gas bottle is reported to have exploded whilst the balloon was approximately 300ft in the air.
Two of the tourists aboard have appeared to have survived the explosion and resultant crash landing, although their current condition is not known.
Tourists from Hong Kong, France and Japan are also said to have been involved in the crash.
Hot air balloon rides are popular in the area as they provide tourists with an arial view of the Karnak temple, and the Valley of the Kings.
Speaking on the Today programme the BBC Egypt correspondent said that there had been complaints of tourists over the apparent lack of regulation of hot air balloon rides.
Sixteen tourists were injured after a hot air balloon crash in 2009, after which pilots were retrained.
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