Militants crossed from Egypt's turbulent Sinai desert into southern Israel on Monday and opened fire, killing an Israeli worker, defense officials said. Two assailants were shot dead in a gunbattle with Israeli troops responding to the ambush.
The Israeli was in a crew building a fence along the porous desert border.
No group claimed responsibility for the attack, which underscored the growing lawlessness in the Sinai desert since longtime Egyptian President Hosni Mubarak was toppled by a popular uprising last year.
Military spokeswoman Lt. Col Avital Leibovich said the assailants have not been identified but said defense officials suspect Palestinian militants in the Hamas-run Gaza Strip might have been involved. Southern Gaza borders Sinai, and infiltrators can exit Gaza through tunnels under the border.
Several hours after the attack, an Israeli airstrike killed two men on a motorcycle in the northern Gaza Strip near the Israeli border. The Islamic Jihad said the men were members on a "reconnaissance" mission and vowed revenge.
Hours later, another airstrike killed two more. The Israeli military said the target was a squad of Palestinian rocket launchers.
Israeli military officials said the incidents were not connected to the earlier infiltration from Egypt.
The mountainous Sinai desert harbors an array of militant groups, including Palestinian extremists and al-Qaida-inspired jihadists, Egyptian and Israeli security officials say.
Israeli Defense Minister Ehud Barak told Army Radio that there has been "a worrisome deterioration of Egyptian control" over the Sinai.
Vice Premier Shaul Mofaz, a former defense minister and military chief, said he hoped Israel could conduct a security dialogue with the Egyptians and demand more forceful policing in the Sinai.
"No doubt Sinai has become a security problem," Mofaz told Army Radio. "(Monday's) incident ratchets it up a notch."
Prime Minister Benjamin Netanyahu said the attack targeted civilians building the security fence. "Its construction is a paramount national interest," Netanyahu declared.
There was no immediate comment from Egypt on the attack.
Israel stepped up construction of a security fence along the 230-kilometer (150-mile) border with Egypt in a bid to keep out both militants and illegal migrants from Africa. The government has said it expects the fence to be completed by the end of the year.
In Monday's attack, two civilian vehicles carrying construction workers were driving toward the security fence when militants activated a roadside bomb and opened light arms and anti-tank fire at them, Leibovich said.
One of the vehicles was struck and turned over into a nearby ditch, killing a worker, she said. Israeli troops rushed to the area and engaged in a gunbattle with the militants. One militant, who was carrying a large explosive device, blew up. Another militant, and possibly two others, were also killed, but others may have escaped back into Egypt, she said.
There was no word on their identities or membership in any of a wide range of armed groups.
Leibovich said Israelis living in five small communities in the area were instructed to lock themselves inside their homes, and two major southern roads were closed to civilian traffic while troops scoured the area for other militants. The military later concluded no other gunmen were in the area.
Two rockets believed fired from Sinai struck southern Israel over the weekend, though Leibovich said it was unclear whether the two events were related.
In the most serious incident in recent years, gunmen from Sinai infiltrated Israel and ambushed vehicles on a desert highway last August, killing eight Israelis. Six Egyptian soldiers were killed during Israel's hunt for the militants, causing a diplomatic crisis between the two neighbors that ended with an Israeli apology.
That attack shattered decades of calm along the frontier area, prompting officials on both sides of the border to examine security arrangements and pushing Israel to speed up construction of the border fence.
As part of its 1979 peace treaty with Egypt, Israel agreed to return the Sinai, captured in the 1967 Mideast war, but insisted the desert triangle separating Asia from Africa be significantly demilitarized.
As the frontier area grew more volatile following Mubarak's ouster, Israel allowed thousands more Egyptian troops to police the area and has beefed up its own military deployment along the border.