Transport Minister Mohammed Lutfy Mansour said investigators were trying to determine whether the fire, which he described as "small," led to the sinking. He also denied survivor accounts of an explosion on board.
Weather may also have been a factor. There were high winds and a sandstorm overnight on Saudi Arabia's west coast.
The ship sank in the dark hours of Friday morning while ferrying people and cars between the Saudi port of Dubah and Egypt's port of Safaga. Survivors said a fire broke out, got out of control and an explosion was heard.
Mahfouz Taha, head of the Egyptian Red Sea Ports authority in Safaga, reported that 376 people were saved by both Egyptian and Saudi rescuers.
CBS News's David Hawkins said hundreds of relatives of passengers nearly rioted in front of police at Safaga port gates as frustration built up over the lack of information about those missing from the ferry's 1,400 passengers and crew. Port officials did not distribute lists of survivor names to the crowd.
"No one is telling us anything," said Shaaban el-Qott, from the southern city of Qena, who waited all night for news of his cousin. "All I want to know if he's dead or alive."
Riot police with truncheons pushed the frantic crowd away from the port compound. Some police could be seen hurling stones back toward the crowd.
Safety standards taken for granted in the West are not in force everywhere, reports CBS News correspondent Mark Phillips and those who work in the business think they know why.
"There are double standards," maritime business writer Patrick Neylon told Phillips. "Regulations are much tighter in northern Europe. They're a bit looser in the Mediterranean and they're looser still in parts of the Third World."
A spokesman for President Hosni Mubarak said the ferry did not have enough lifeboats, and questions were raised about the safety of the 35-year-old, refitted ship that was weighed down with 220 cars as well as the passengers.
Many survivors said the fire began about 90 minutes after departure, but the ship kept going. Their accounts varied on the fire's location, with some saying it was in a storeroom or the engine room.
"Fire erupted in the parking bay where the cars were," said passenger Ahmed Abdel Wahab, 30, an Egyptian who works in Saudi Arabia. "We told the crew: 'Let's turn back, let's call for help,' but they refused and said everything was under control.
"We heard an explosion and five minutes later the ship sank," he added.
Wahab claimed that as passengers began to panic, "crew members locked up some women in their cabins." He did not explain if the women were confined as a matter of modesty or because they were causing a disturbance.
"After a while, the ship started to list and they couldn't control the fire. Then we heard an explosion and five minutes later the ship sank," Wahab said.
Bakr el-Rashidi, the governor of Egypt's Red Sea province, said that as the crew was fighting the fire, "the ship tipped over, the wind was very strong, and people moved to one side, so all of that caused the ship to sink. It happened so quickly."
Wahab, a martial arts trainer, said he spent 20 hours in the sea, sometimes holding onto a barrel from the ship and later taking a lifejacket from a dead body before he was hauled onto a rescue boat.
Ahmed Elew, an Egyptian in his 20s, said he went to the ship's crew to report the fire and they ordered him to help put it out. He also said there was an explosion.
When the ship began sinking, Elew said he jumped into the water and swam for several hours. He said he saw one lifeboat overturn because it was overloaded with people, but eventually got into another lifeboat.
"Around me people were dying and sinking," he said. "Who is responsible for this? Somebody did not do their job right."
Mubarak flew to the port of Hurghada, about 40 miles further north, to visit survivors in two hospitals, Egypt's semiofficial Middle East News Agency reported.
Some survivors were taken from the ferry's lifeboats, others from inflatable rescue craft dropped into the sea by helicopters, and others were pulled from the water wearing life jackets, el-Rashidi said.
Rescue efforts appeared to have been confused. Egyptian officials initially turned down a British offer to divert a warship to the scene and a U.S. offer to send a P3-Orion maritime naval patrol aircraft to the area. In the end, the Orion , which can search under water from the air, was sent, but the HMS Bulwark was not, said Lt. Cdr. Charlie Brown of the U.S. 5th Fleet, based in Bahrain.
Four Egyptian rescue ships reached the scene Friday afternoon, about 10 hours after the ferry likely went down nearly 60 miles off the Egyptian port of Hurghada.