Israel hunts for abducted soldier after dawn raid by militants

Israeli tanks, supported by helicopter gunships, were combing the southern Gaza Strip yesterday for Palestinian fighters who killed two tank crew members and kidnapped a third in a pre-dawn attack on an army base on the Israeli side of the border.

Lieutenant-General Dan Halutz, the Israeli chief of staff, said they had reason for thinking the missing soldier, 19-year-old Corporal Gilad Shalit, was alive. A spokesman for the abductors said he had stomach wounds but his condition was stable.

Two Palestinians were killed in exchanges of fire inside Israel before their comrades escaped back across the security fence. One Israeli was seriously wounded and three others lightly. The Hamas military wing claimed responsibility in partnership with the smaller Popular Resistance Committees and a hitherto unknown group, the Army of Islam.

Yesterday's raid, near the Kerem Shalom crossing between Israel, Egypt and Gaza, was the first Palestinian ground attack from Gaza since Israel pulled out of the strip 10 months ago. Israel's incursion was the largest during the same period.

In an escalation of rhetoric to match the escalation on the battlefield, political and military officials threatened to strike at Palestinian leaders if the missing soldier was not returned safe and well. Israel's inner security cabinet was meeting last night to decide how to retaliate.

Mahmoud Abbas, the relatively moderate Palestinian President who had been trying to restore a ceasefire after weeks of missile fire and shelling in both directions, condemned the militants for giving Israel "a pretext to launch a widespread military operation". Nabil Abu Rudeineh, his spokesman, feared a wave of Israeli "aggression, incursions and assassinations".

Ehud Olmert, the Prime Minister, said he held Mr Abbas and Ismail Haniyeh, the Hamas Prime Minister, responsible for the soldier's fate "with all that implies". Ra'anan Gissin, Mr Olmert's spokesman, accused Mr Haniyeh's Islamist government of "encouraging and initiating" yesterday's raid.

General Halutz admitted at a press conference in Kerem Shalom that the well-planned and co-ordinated attack caught his troops off-guard. Seven or eight gunmen penetrated the border via a 300m-long tunnel dug deep in the sandy soil. Asked by an Israeli reporter whether the army knew of the tunnel, the chief of staff replied curtly: "If we'd known about it, it wouldn't have existed."

A military spokesman said the raiders struck at about 5.30am. They split into three groups. The first blew up an empty armoured personnel carrier. A second threw grenades at a tank, which also came under a barrage of missiles from the Gaza side. One grenade penetrated the turret, killing the commander and one of his men and severely wounding a third. One of the crew was abducted. Another group opened automatic fire at a 25m-high watchtower.

As well as hunting for the kidnapped soldier, the Israeli invasion force secured the area around the tunnel. Army engineers were preparing to destroy it. Witnesses reported warplanes firing on houses near the border.

Sami Abu Zuhri, a Hamas spokesman, celebrated yesterday's operation as "a natural response to the Israeli crimes of killing women and children and the assassination of two military leaders". The Palestinians blame Israel for killing about 20 civilians in retaliation for rocket fire on Sderot and other border communities.

A joint statement by the three jubilant Palestinian militias boasted: "This is a landing behind enemy lines. The operation targeted military and intelligence facilities."