Israeli ground troops entered the Gaza Strip hours later, their tanks blowing up smoke and dust as they made their way about a half-mile into the Palestinian-controlled territory, an Associated Press reporter at the scene said.
Palestinians were ordered to evacuate the area, while helicopter gunships fired at open fields.
The army confirmed a small force had entered Gaza to search the tunnel area. The army wouldn’t say how many troops were involved in the operation.
The militant strike, the first of its kind since Israel withdrew from the Gaza Strip in August, came days after Israel warned that militants were planning an attack on the area, causing the Gaza-Egypt border to be shut down for several days.
The small Popular Resistance Committees claimed responsibility for the attack near the Kerem Shalom crossing, saying militants from the ruling Hamas group and from a previously unknown group, the Islam Army, participated in the attack. The PRC said three militants were killed in fighting.
Two Israelis were killed in the attack, security sources said on condition of anonymity because they were not authorized to speak to the media. At least five other Israelis were wounded, including three from a bomb detonated shortly after the initial strike, the army said.
The violence comes at a time of heightened tensions over Palestinian rocket attacks on Israeli towns and retaliatory Israeli air strikes that have killed 13 civilians in recent weeks. Palestinians also blame Israeli artillery for an explosion at a Gaza beach that killed eight civilians, but Israel denies it was responsible.
“Our fighters infiltrated the Israeli army military location near so-called Kerem Shalom,” said Abu Mujahid, another PRC spokesman. “They succeeded in blowing up several Israeli vehicles and clashed with Israeli soldiers. The battle is still going on. The number of fighters is bigger than ever. We have some martyrs who fell during the battle.”
He said full details of the operation would be released at a news conference later Sunday.
Residents in a nearby communal farm said the Palestinian militants infiltrated the military post through a tunnel dug under the border fence.
Abu Mujahid refused to confirm the report, but said: “It was a very complicated and well-studied operation. The details are going to shock the Zionists. There are many surprises that are going to be announced about planning and about the process and about the battle itself.”
He said the operation was meant to avenge the death of the group’s leader, Jamal Abu Samhadana, in an Israeli airstrike earlier this month. Abu Samhadana was killed shortly after accepting a senior security position in the Hamas-led government.
Palestinian militants have often attacked the main crossing points between Israel and the Gaza Strip, leading them to be shut down and causing economic hardship in the already poverty-stricken coastal area.
The Israeli army issued warnings last week that militants were plotting an attack near the Kerem Shalom and Sufa crossings. The warning prompted EU monitors to close the nearby Rafah crossing, Gaza’s main gateway to the outside world.