Palestinian militants ambushed an Israeli army jeep patrolling the Gaza border before attacking a rescue crew that rushed to the scene, according to military and witness accounts.
One Israeli soldier was killed and three others wounded in the brazen cross-border attack.
The ambush raised the possibility of a fresh round of violence in Gaza, just two days after Israel ended an offensive that killed more than 120 Palestinians. Senior Israeli military officers held an emergency meeting to plot a response, officials said.
Palestinian witnesses said a large explosion tore through the jeep, which was on the Israeli side of the border fence near the Kissufim crossing into central Gaza, and set it on fire.
Several other army vehicles, along with an army helicopter, arrived to rescue the wounded, but came under fire, the witnesses said.
Military officials said a bomb had been set off next to the jeep. One of the wounded was in serious condition, the army said.
Islamic Jihad, a tiny Islamic militant group with links to Iran, claimed responsibility for the ambush. Hamas, the larger militant group that rules Gaza, said its men also participated in the attack.
Revenge attack for deadly airstrike
Abu Ahmad, a spokesman for Islamic Jihad, said the attack was revenge for an Israeli strike a day earlier that killed one of the group's commanders in southern Gaza.
"We are sending our message to all the Zionist criminals," he said. "Your threats to target the leaders of resistance ... won't scare us. We are going to continue our resistance and holy war, and we will continue to rain rockets on your colonies until we make them ghost towns."
For months, Israel has been operating in Gaza against Palestinian militants who fire rockets into southern Israel. Last week, it launched a ground and air offensive in response to especially heavy rocket fire, including several barrages that reached as far as Ashkelon, a city of 120,000, 11 miles north of Gaza.
Israel withdrew its ground forces from northern Gaza on Tuesday, leaving a wide scene of destruction in its wake. Palestinian medical officials say more than half of the dead were civilians. Israel accuses Hamas militants of using civilians for cover.
Palestinian President Mahmoud Abbas suspended peace talks with Israel earlier this week to protest the violence in Gaza. Despite Abbas' rivalry with Hamas, Israeli military action is so unpopular with the Palestinian public that it undermines his authority and makes it difficult for him to negotiate with Israel.
Hamas violently seized control of Gaza from Abbas' forces last June. Abbas wields no control in Gaza, but continues to claim to represent the area's 1.4 million people.
On Wednesday, Abbas said he would not return to the negotiating table until Israel reached a truce in Gaza. However, under pressure from visiting Secretary of State Condoleezza Rice, Abbas backtracked and agreed to resume talks, though it remained unclear when negotiations will restart.
Unofficial truce with Hamas not ruled out
Israel has been negotiating with Abbas, a moderate who rules from the West Bank, since last November. At the same time, it continues to battle the Hamas militants who control the Gaza Strip. Israel has also imposed a painful economic embargo on Gaza, causing widespread hardship in the already impoverished area.
Prime Minister Ehud Olmert's office announced Wednesday that Israel would maintain its pressure on Hamas. Olmert did leave the door open to an unofficial truce with Hamas.
"If there is no rocket fire at Israel, there won't be Israeli attacks on Gaza," he told reporters.
In other violence Thursday, Israeli forces attacked a rocket-launching site in the northern Gaza Strip, killing one militant, Palestinian medics said. The army said it had carried out an airstrike on a launching site.
A Palestinian rocket fired from the Gaza Strip also slammed into a house in southern Israel on Thursday. There was no immediate word on casualties.
Police spokesman Micky Rosenfeld said the attack occurred in Sderot, the southern Israeli border town that has repeatedly been hit by rocket fire in recent years.
The Islamic Jihad militant group claimed responsibility.