At least one Israeli soldier has been killed and several others wounded by unidentified gunmen, shooting from across the Jordanian border. A manhunt is underway for the attackers.
The usually quiet border with Jordan erupted in violence early in the morning, when gunmen fired across the border at Israeli soldiers near the town of Beit Shean.
Israeli soldiers backed by helicopters have crossed into Jordan to help Jordanian troops search for the gunmen.
The border area has been relatively calm since Israel and Jordan signed a peace treaty in 1994. That quiet was broken once in 1997 when a crazed Jordanian soldier shot and killed seven young Israeli girls.
Several other shooting incidents were reported overnight in the West Bank and Gaza. Before dawn Israeli tanks and troops entered the West Bank near Nablus and arrested seven militants.
On Monday evening, the Al Aqsa Brigades, a militant group linked to Palestinian leader Yasser Arafat's Fatah movement, claimed responsibility for shooting a Jewish settler in the West Bank. The group says it acted in revenge for Israel's travel ban on Mr. Arafat. The settler shot dead one of his attackers.
Israel barred the Palestinian leader from traveling to Bethlehem, despite international mediation efforts. Mr. Arafat has attended Christmas Eve church services in Bethlehem since it came under Palestinian control in 1995.
Israel said he could go only if he handed over suspects linked to the murder of an Israeli government minister.
In a T.V. speech to Palestinians, Mr. Arafat called the Israeli ban a crime and a violation of religious freedoms. Children in Bethlehem's Christmas pageant carried posters with Mr. Arafat's image in a show of solidarity with their leader.