Palestinian militants launched Sunday their first deadly raid into Israel from Gaza since an Israeli pullout last year, killing two soldiers and abducting another in an assault in which two attackers died.

The infiltration, through a tunnel militants dug under the Gaza border fence to reach an army post, raised tensions along the frontier to their highest point since Israel completed its withdrawal last September after 38 years of occupation.

Israeli forces scrambled into the Gaza Strip to search for the missing soldier, who the army said had been kidnapped. There was no immediate claim from any of the militant groups that took part in the dawn raid that they were holding him.

A strong Israeli military response to the assault, claimed by the armed wing of the governing Hamas group and the Popular Resistance Committees (PRC) as an "earthquake reaction" to recent air strikes that killed 14 Palestinian civilians, seemed likely.

"This was a very serious Hamas terrorist attack," Israeli Prime Minister Ehud Olmert said in broadcast remarks.

"Israel sees the Palestinian Authority headed by Chairman Abu Mazen (Mahmoud Abbas) and the Palestinian Government responsible for the incident, with all that implies," he said, raising speculation Hamas leaders could be targeted.

Abbas, in a statement, said the raid, near the Kerem Shalom crossing, "violated the national consensus." He called on the international community "to prevent Israel from exploiting the attack to carry out large-scale aggression in the Gaza Strip."

An Israeli military spokesman said seven to eight gunmen had infiltrated underground and divided into three groups. One group attacked an empty armoured personnel carrier, a second attacked a tank with grenades and the third fired at another position.

"Then they returned to Gaza ... We have two dead, three wounded and a soldier that is missing," the spokesman said.

"As far as we know, the soldier is alive," Israeli army chief of staff Dan Halutz later told a news conference.

Hamas and the PRC said two gunmen were killed.

'Limited entry'

A spokesman for Hamas' Izz el-Deen al-Qassam brigades declined to confirm or deny holding the missing soldier.

Olmert planned a day of security consultations, culminating in a meeting at 6:30 PM (15:30 GMT) of his inner cabinet, which would discuss military options, political sources said.

The attack seemed certain to complicate Abbas's efforts to persuade Hamas, an Islamist group dedicated to Israel's destruction, to soften its line. Hamas took power in March after winning a January election.

Against Hamas' wishes, Abbas has scheduled a July 26 referendum on a manifesto that implicitly recognises Israel's right to exist. He has said he would cancel the vote if he reaches an agreement with Hamas on a political platform.

Witnesses said that in the aftermath of the gun battle, two Israeli tanks backed by a helicopter crossed into an empty field in the Gaza Strip. The army said it was a "limited entry" to search the area for the missing soldier.

Israeli air strikes, amid daily cross-border rocket launchings from Gaza, have killed 20 Palestinians in the past two weeks, 14 of them civilians.

Hamas and the PRC said the assault was also in response to Israel's assassination this month of PRC leader Jamal Abu Samhadana.

(China Daily June 26, 2006)