The balloon was at 300m (1,000ft) when it caught fire and plunged into fields west of the ancient city.
At least two people, including the balloon's pilot, are reported to have jumped out of the balloon before it crashed.
Officials in Luxor say they have now banned all hot air balloon flights.
People were jumping out of the balloon from about the height of a seven-storey building
Witness Cherry Tohamy
The UK Foreign Office said that two British nationals and one British resident had died. One of them was said to have undergone five hours of surgery in an effort to save his life, but died of his injuries. Another Briton is in a stable condition in hospital.
"The next of kin have been informed and our thoughts are with them and their families at this difficult time. We are providing them with consular assistance," it said in a statement.
The dead also included nine Hong Kong tourists, four from Japan, two French, one Hungarian and an Egyptian, Egypt's health ministry said.
The Chinese and Japanese embassies in Cairo, and the French foreign ministry, also confirmed that their nationals were among those killed. The Hungarian is understood to have been the British resident who died.
The pilot, who is being treated for burns, survived by jumping when the balloon was just 10-15m (33-49ft) above ground, a local ballooning official told Reuters news agency.
Luxor lies on the banks of the River Nile in the south of the country, and has long been a popular tourist destination.
It is home to some of Egypt's most famous ancient ruins, with the temples of Karnak and Luxor in the city itself and the tombs of famed pharaohs - including Tutankhamen - in valleys nearby.
Map of balloon crash site in Luxor, Egypt
The governor of Luxor, Ezzat Saad, told the BBC he wanted to send his condolences to the families of those killed and injured.
"We have never seen anything quite like this in Luxor before. It is an awful thing," he said.
"For the safety of the tourists and the Egyptians I have ordered all the companies dealing with balloons to stop flights until we know exactly what happened and the reasons for it."
The crash happened on one of the many dawn hot air balloon flights that give tourists an aerial view of Luxor's famous sites, such as Karnak temple and the royal tombs in the Valley of the Kings.
The balloon's operating company, Sky Cruise, said a gas cylinder exploded on board, bringing it down in sugar cane fields just west of Luxor.
The balloon was at 300m (1,000ft) when it caught fire and plunged into fields west of the ancient city.At least two people, including the balloon's pilot, are reported to have jumped out of the balloon before it crashed.Officials in Luxor say they have now banned all hot air balloon flights.People were jumping out of the balloon from about the height of a seven-storey buildingWitness Cherry TohamyThe UK Foreign Office said that two British nationals and one British resident had died. One of them was said to have undergone five hours of surgery in an effort to save his life, but died of his injuries. Another Briton is in a stable condition in hospital."The next of kin have been informed and our thoughts are with them and their families at this difficult time. We are providing them with consular assistance," it said in a statement.The dead also included nine Hong Kong tourists, four from Japan, two French, one Hungarian and an Egyptian, Egypt's health ministry said.The Chinese and Japanese embassies in Cairo, and the French foreign ministry, also confirmed that their nationals were among those killed. The Hungarian is understood to have been the British resident who died.The pilot, who is being treated for burns, survived by jumping when the balloon was just 10-15m (33-49ft) above ground, a local ballooning official told Reuters news agency.Luxor lies on the banks of the River Nile in the south of the country, and has long been a popular tourist destination.It is home to some of Egypt's most famous ancient ruins, with the temples of Karnak and Luxor in the city itself and the tombs of famed pharaohs - including Tutankhamen - in valleys nearby.Map of balloon crash site in Luxor, EgyptThe governor of Luxor, Ezzat Saad, told the BBC he wanted to send his condolences to the families of those killed and injured."We have never seen anything quite like this in Luxor before. It is an awful thing," he said."For the safety of the tourists and the Egyptians I have ordered all the companies dealing with balloons to stop flights until we know exactly what happened and the reasons for it."The crash happened on one of the many dawn hot air balloon flights that give tourists an aerial view of Luxor's famous sites, such as Karnak temple and the royal tombs in the Valley of the Kings.The balloon's operating company, Sky Cruise, said a gas cylinder exploded on board, bringing it down in sugar cane fields just west of Luxor.
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