47 nursery school children were killed when a train smashed into their bus in central Egypt after a railway signal operator fell asleep.

Transport Minister Rashad al-Metini stepped down after the tragedy, which also killed the bus driver and his assistant, saying he "accepts responsibility."

President Mohamed Morsi also accepted the Egyptian Railway Authority chief's resignation.

"There are now 49 deaths and 18 injuries," with almost all of the casualties children, Assiut provincial governor Yehya Keshk told state television.

The bus taking 60 children aged between four and six on a school trip organised by their nursery was struck on a railway crossing in Manfalut, 360 kilometres (220 miles) south of Cairo, police said.

The worker manning the level crossing -- which had been left open -- was asleep when the bus tried to cross the tracks, Keshk said. "He has been arrested of course.

"There is a team of 45 doctors looking after the injured children," Keshk said.

Parents of the children held angry demonstrations near the scene of the accident, demanding the death penalty for those responsible, police said.

A state television correspondent described the scene as "terrifying" with the blood-splattered bodies of children on the ground, before they were taken to nearby Manfalut hospital.

In a brief television address, Morsi offered his condolences to the families and said those responsible would be referred to the public prosecutor.

"On my and the Egyptian people's behalf, I offer my sincerest condolences to the families," the president said. "I am referring all those responsible to the public prosecution."

Earlier, Morsi ordered the prime minister, the defence and health ministers and the Assiut governor "to offer all assistance to the families of the victims," the official news agency MENA said.

Prime Minister Hisham Qandil and his interior minister headed to Assiut, the news agency added.

Activist groups have called for the resignation of Qandil's cabinet.

"This accident proves the failure of Qandil's government and strengthens the demands for the resignation of a government that has failed, over several months, to produce anything to improve the suffering of Egyptians," the April 6 movement said.

The railway network's poor safety record stems largely from lack of maintenance and poor management. In Egypt's deadliest railway tragedy, the bodies of more than 360 passengers were recovered from a train after a fire in 2002.

Keshk has ordered the "formation of a fact-finding committee" to probe Saturday's accident, but in similar tragedies in the past, such panels have done little to shed light on the details and less still to bring about accountability.

In a separate road accident, 12 people were killed and three injured when a truck smashed into a minibus near the Egyptian capital.

Officials said a speeding truck driving on the wrong side of the road crashed into a minibus carrying 15 passengers. The truck driver was arrested at the scene in the 6th October area, as rescue services worked to extract the bodies, police said.

Egyptians have long complained that the government has failed to deal with the country's chronic transport problems, with roads as poorly maintained as railway lines.

Earlier this month, five people were killed and dozens injured when two trains collided in Fayyum province, southwest of Cairo. A month earlier, 28 police died in the Sinai peninsula when the driver of their bus lost control at the wheel.