Pushing an increasingly volatile confrontation closer to open war, both Israel and Hamas raised the stakes Sunday following several weeks of cross-border violence.
Israeli tanks entered the Gaza Strip after Hamas militants tunneled into southern Israel, launching an attack in which they killed two Israeli soldiers and took one hostage.
The uncharacteristically sophisticated abduction, nine months after the army withdrew from Gaza, evoked Hizbullah's kidnapping of three Israeli soldiers within months of Israel's exit from Lebanon in 2000. But in this case, Israel sees itself as free to reenter Gaza to punish the recently elected government that it considers to be led by terrorists.
"Hamas is involved from the soles of its feet to the head," said Israeli army Chief of Staff Dan Halutz told reporters, signaling that Israel holds the Palestinian Authority (PA) responsible for the fate of its kidnapped soldier.
Emerging at dawn Sunday from a tunnel nearly one-quarter of a mile long under the border , a team of militants used anti-tank missiles and grenades to attack the Israeli tank near the Kerem Shalom border crossing between Israel and Gaza. Two Palestinians who split off from the group were killed while assaulting a military border outpost.
The attack came just hours after Palestinian President Mahmoud Abbas met with Prime Minister Ismail Haniyeh in Gaza to finalize an unprecedented agreement on sharing power that includes a moratorium on attacks inside of Israel, precisely like Sunday's raid.
Hamas's military wing has for the most part observed a year and a half cease-fire in attacks on Israel, allowing other militias to take the initiative in launching rocket attacks at Israeli communities near Gaza.
Sunday's raid is "a kind of a qualitative escalation. There are strong reasons for the security establishment to conclude that the Hamas leadership knew about it even if it wasn't involved in it," says Mark Heller, a fellow at Tel Aviv University's Jaffee Center for Strategic Studies. "I wouldn't be at all surprised if the Israeli military response sets in motion a dynamic that would lead to an all-out war with Hamas."
A Hamas military leader said the attack was in retaliation for Israel's assassination of Jamal Abu Samhadanah, a militant commander turned Interior Ministry official who was killed in an Israeli airstrike earlier this month.
"This is an answer to the Israeli aggression," says Sami Abu Zuhri, Hamas's political spokesman.
Later on Sunday, the Hamas government spokesman, Ghazi Hamad, made a rare appeal to the organization's militants to look after the health of the kidnapped soldier.
Israeli analysts speculated that just as Hizbullah used the abduction in 2000 as a bargaining chip to secure the release of Lebanese militants held in Israel, Hamas hopes to do the same with the soldier kidnapped Sunday. The fact that Mr. Hamad spoke in Hebrew indicated that Hamas may have taken a page from Hizbullah's effective use of psychological warfare aimed at the Israeli public.
Mr. Abbas, a moderate who heads the recently defeated Fatah party, called for the soldier's release, throwing into sharp relief the difficulties of collaboration between the two parties.
Israeli Foreign Minister Tzippi Livni said she spent the day on the phone with counterparts abroad asking them to pressure Abbas to use the weight of his office to secure the soldier's release and safe return to Israel.
"Alongside the status, he has a responsibility," said the Israeli foreign minister, who then referred to the Palestinian leader by his nickname, Abu Mazen. "He has an obligation to act so that the soldier returns home to Israel safely. That is the expectation of the international community of Abu Mazen."
Ms. Livni's comments highlighted a dilemma that Israel has been grappling with ever since Hamas came to power: How to undermine the Islamic militant government without causing the collapse of the entire Palestinian government and the demise of Abbas.
In formulating a retaliation, Israeli military planners will have to calculate whether to hit Palestinian government targets controlled by Hamas and whether the fallout is likely to hurt a Palestinian president who is viewed sympathetically by the international community.
"There might be some kind of effort to make a distinction between Hamas controlled institutions and individuals and those with Abu Mazen, but it will be a difficult thing to do in practice," says Tel Aviv University's Mr. Heller.
But, the public trauma of the kidnapping of an Israeli soldier will ratchet up pressure on Israel's government to retaliate in a way that it has refrained from when it was grappling with the threat of rocket attacks.
That could reduce the ability of Mr. Haniyeh and Abbas to reach an agreement on a document that includes an implicit recognition of the state of Israel and a plan to overhaul the Palestinian cabinet with appointees from Fatah.
Some analysts suggested that attack was ordered by the Hamas's hard-line Damascus-based political leader Khaled Meshal and that it would undermine the standing of Prime Minister Haniyeh, who is trying to take a conciliatory line with Fatah after weeks of internecine violence.
"Ismail Haniyeh can't pull the strings and he can't tell the men with the guns what to do," says Shmuel Bar, a Middle East expert at the Herzlyia Interdisciplinary Institute.
Hamas's Hamad, meanwhile, confirmed reports that Egyptian mediators were trying to negotiate the release of the Israeli captive.
Israel Radio reported that Israel's security cabinet was scheduled to convene in Tel Aviv Sunday evening to decide on a possible retaliation. Although the Israeli military chief said in a press conference that the attack took the army by surprise, the government-run radio station said that Israeli Shin Bet intelligence agents warned of just such an infiltration as early as last week.
Palestinian militants have successfully struck in the past at other border crossings with Israel, halting the passage of day laborers and commercial goods for weeks.
The Kerem Shalom border crossing is less traveled by Palestinians, but it functions as a passage way for European Union monitors who oversee the operations of the Palestinians' sole international crossing into Egypt. The Rafah crossing was reportedly closed on Sunday after the attack.