Four Israeli soldiers and two Palestinian gunmen are dead following an attack on a military post near the Gaza Strip.
The Israeli army says troops shot and killed Palestinian gunmen who threw grenades and fired automatic weapons during an attack on an army position in southern Israel, close to the border of the Gaza Strip and Egypt.
One Israeli officer and three soldiers died during the assault. The soldiers were Bedouins serving in the Israeli military.
The army says the Palestinians were killed after they cut through a fence and entered Israeli territory.
The military says the gunmen were wearing Palestinian police uniforms when they launched the assault.
The militant group Hamas claimed responsibility for the raid.
The Palestinian Authority condemned the attack, expressing concern it could lead to an escalation by the Israeli military.
The incident was the most serious in the region since Palestinian leader Yasser Arafat last month called for an end to suicide bombings and armed attacks against Israelis.
Israeli government spokesman Avi Pazner says the attack is proof the Palestinians will not honor a truce. "This murderous attack is of great concern to us because it proves that the Palestinian Authority is not serious about maintaining a cease-fire," he said.
The violence is sure to increase tensions, already fueled by Israel's capture last week of a freighter in the Red Sea carrying a large amount of weapons it said were being shipped to the Palestinians.
Palestinians have denied involvement in the shipment, but the captain of the boat says he received his orders from officials in the Palestinian Authority.
Israeli commandos found 50 tons of munitions on board, including rockets and anti-tank weapons.
The seizure of the ship and the continuing violence are overshadowing efforts by the United States and European Union to broker a permanent cease-fire and end more than 15 months of Israeli-Palestinian bloodshed.