Deadly attacks hit Israeli vehicles near Egypt
At least seven people have been killed in a series of attacks on vehicles in southern Israel, Israeli medics say.
The attacks began when gunmen fired at an Israeli bus that was travelling near the Egyptian border.
Officials said two other vehicles were hit - one by a rocket and one by an explosive device - and that several gunmen died in an ensuing firefight.
It is the first major attack on Israel's border with Egypt for several years, the BBC's Paul Danahar reports.
"This was a grave incident in which Israelis and Israeli sovereignty were harmed," said Israeli Prime Minister Benjamin Netanyahu. "Israel will respond accordingly."
Israeli officials said the gunmen came from the Gaza Strip and had entered Israel through Egypt's Sinai desert.
"The real source of the terror is in Gaza and we will act against them with full force and determination," said Israeli Defence Minister Ehud Barak.
He also said that the "incident underscores the weak Egyptian hold on Sinai and the broadening of the activities of terrorists".
There has been concern about a decline in security in Sinai since Egyptian President Hosni Mubarak was toppled in February.
The Hamas government in the Gaza Strip denied any connection with the attacks, with spokesman Taher al-Nunu saying claims that the assailants came from Gaza were "an attempt to distract from the Israeli domestic crisis".
Leaders of an escalating protest movement in Israel against high living costs called off demonstrations planned for the weekend, Reuters news agency reported.
Hamas MP Salah Al Bardaweel told the BBC: "The attack is a natural reaction of the occupation aggression in Gaza."
Israeli authorities say the first attack took place on bus 392 carrying passengers between the Israeli city of Beersheba and the coastal resort city of Eilat, about 20km (12 miles) north of Eilat.
Reports say two or three men climbed out of a car as the bus travelled on Highway 12 next to the Egypt-Israel border and opened fire on it.
The bus driver carried on until he reached a nearby military base where the wounded received treatment before being flown to a hospital in Eilat. Most people on the bus were tourists, although there were reports that some soldiers were also on board.
Israeli officials say the assailants then fired an anti-tank missile at another vehicle and a military patrol hit an explosive device.
The attacks are believed to have been carried out by the same gunmen, who were then involved in a firefight with Israeli security forces near the border.
The Israeli military said seven assailants had been "hit", with Israeli TV channels reporting that they had been killed. At least 25 people were said to have been wounded.
A passenger on the bus described the attack: "I was just talking to a guy sitting next to me and we suddenly heard shots, and we immediately bent over and that's it, pieces of glass were flying, and we realised some people were injured."
BBC World Affairs correspondent Jonathan Marcus says there have been mounting fears in Israel that Islamist militants in the Gaza Strip could use the Sinai's long and relatively open border with Israel to mount just such an attack.
He says Egypt has increased its troop numbers in the Sinai well beyond the limits allowed in its peace treaty with Israel, and the Israeli government has not objected, given its desire to see security tightened.
Khalid Fuda, governor of Egypt's South Sinai region, denied reports that any shooting targeting Eilat had came from the Egyptian side in Taba.
Initial reports about the attacks were vague and conflicting.
It was earlier reported that an explosion had taken place in the southern city of Beersheba, but Israeli radio later retracted that report.