JERUSALEM -- Squads of gunmen armed with heavy weapons and explosives crossed into southern Israel from Egypt's Sinai Peninsula on Thursday, killing seven Israelis in an audacious series of attacks, officials said. The violence stoked concerns about Palestinian militants exploiting instability in Egypt.
The attacks began around midday and lasted for about three hours. Israeli security forces tracked down some of the assailants and killed several in a gunbattle, military spokesman Brig.-Gen. Yoav Mordechai said. Defense officials said three bodies were booby-trapped and Israeli TV channels said seven attackers were killed. There was no immediate word on whether any were captured alive or exactly how many in all were involved.
Israel almost immediately said the attackers came from the Hamas-ruled Gaza Strip and made their way through Sinai, which borders both Israel and Gaza. That raised the specter of an Israeli military reprisal against the Palestinian territory. Egypt and Hamas denied the allegations.
"The incident underscores the weak Egyptian hold on Sinai and the broadening of the activities of terrorists," Israeli Defense Minister Ehud Barak said in a statement. "The real source of the terror is in Gaza and we will act against them with full force and determination."
The attacks, which came close together in time and location, appeared coordinated, and represented one of the boldest strikes in years against Israel.
Security in Sinai has deteriorated sharply since February, when longtime leader Hosni Mubarak was ousted in a popular uprising. Many Israelis saw Mubarak as a source of stability with shared interests in containing Iran and its radical Islamic proxies in the region, such as Hamas. Mubarak also upheld the decades-old peace treaty with Israel.
Last week, Egypt moved thousands of troops into the Sinai peninsula as part of a major operation against al-Qaida inspired militants who have been increasingly active in Sinai since Mubarak's ouster in February. The militants have taken advantage of the security vacuum caused by the abrupt withdrawal of police forces. Authorities have blamed the militants for brazen attacks on police patrols as well as a string of bombings on a key pipeline carrying natural gas to Israel and Jordan.
The attacks began around midday, when assailants targeted a packed passenger bus driving along a highway about 10 miles north of the Red Sea resort of Eilat, close to the border crossing into Sinai. Within the space of about an hour, the attackers opened fire on two more buses and two civilian cars, and an army patrol drove over an explosive device after rushing to the area, the military said.
Around the same time, an undisclosed number of mortar shells were fired from the Gaza Strip at Israeli soldiers conducting routine maintenance work on the security fence along the Israel-Egypt border.
Israel Radio said a vehicle had followed the bus, and two to three gunmen got out and opened fire with automatic weapons.
The vehicle carrying the assailants fled the scene, and Israeli security forces took off in pursuit, Israel Radio said. Channel 2 reported that two helicopters had been deployed to join the chase.
TV footage showed the bus pulled over by a red, rocky cliff. Windows and a door of the bus were shattered, and soldiers were patrolling the area on foot. Inside the bus, seats were stained with blood and luggage littered the aisle.
"We heard a shot and saw a window explode. I didn't really understand what was happening at first. After another shot there was chaos in the bus and everyone jumped on everyone else," passenger Idan Kaner told Channel 2 TV. He said the attack lasted three or four minutes until the bus was able to drive away.
The bus driver interviewed by Channel 2 did not provide details of the attack but appeared calm, smoking a cigarette in the driver's seat.
After that, an explosive device was detonated under the vehicle of a military patrol called to the scene, and a private car was also attacked. The attackers might have fired mortars and an anti-tank missile at that vehicle, said Mordechai, the military spokesman.
Roadblocks were thrown up in the area and entrances and exits to Eilat were sealed. Senior Israeli security officials convened in an emergency session at the defense ministry in Tel Aviv.
The military said a "large number" of assailants were working in multiple squads, but it gave no specifics.
"We are talking about a terror squad that infiltrated into Israel," said Israeli military spokeswoman Lt. Col. Avital Leibovich. "This is a combined terrorist attack against Israelis."
The driver of the bus said he had seen Egyptian soldiers open fire, but Mordechai said he was not aware of any Egyptian military involvement.
In Egypt, a senior security official denied that the attackers crossed into Israel from Sinai or that the buses were fired at from inside Egyptian territory.
"The border is heavily guarded," said a Sinai-based official who spoke on condition of anonymity because he was not authorized to speak to the media.
Israeli government spokesman Mark Regev said the attackers came from Gaza.
"This is specific information. This is not an assessment. This is not an estimation. This is very, very precise information that they came out of Gaza. We have no doubt." He would not provide more specific details.
Taher Nunu, a spokesman for the Hamas government in Gaza, denied the militants' complicity.
"Gaza has nothing to do with these attacks in Eilat," Nunu said.
The attacks by a team of apparently coordinated squads also highlighted the potential for a sharp spike in violence as Palestinians prepare to ask the United Nations to recognize them as an independent state.
Palestinian militants in Hamas-ruled Gaza have fired intermittent barrages of mortar shells into Israel for a decade, even after the Israeli military launched an offensive in the territory in late 2008. But in recent years Israel has not suffered the repeated deadly suicide bombings and shooting attacks of years past. The area of Thursday's attacks has been largely quiet since Israel and Egypt signed a peace deal in 1979.
Palestinian leaders in the West Bank have drawn up plans for rallies in September in hopes of boosting their drive for U.N. recognition -- an initiative begun after Palestinians lost faith in peace talks with Israel. Those negotiations have been frozen for most of the past three years and there is no sign the two sides can agree on conditions to resume them.