The enemy force entered Israel through a deep tunnel they had built for the occasion, and then, at 5:30 AM, attacked on different fronts. One group attacked and blew up an empty IDF armed personnel carrier. Brig.-Gen. Aviv Kokhavi, head of the Gaza Formation, said that the vehicle "had been placed there for that very purpose" - diverting a terrorist force and drawing fire.

At the same time, another group of terrorists opened fire at soldiers, who returned fire and killed two Hamas men. A third group attacked an IDF tank, killing an officer and a soldier, seriously wounding another soldier, and kidnapping a fourth. The group escaped back towards Gaza by blowing open a hole in the border fence.

IDF forces followed the terrorists and the abducted soldier into Gaza soon afterwards, but did not find them. The search continues for the soldier - Gilad [ben Aviva] Shalit, 19, of Hila in the Galilee, just five miles from the Lebanese border.

Two other soldiers were lightly wounded in the multi-pronged attack, though the condition of one of them has since deteriorated, and he is now listed in "moderate" condition.

IDF Chief of Staff Lt.-Gen. Dan Halutz said at a press conference today that the abducted soldier is alive, and then added, "as far as we know." His announcement did not put an end to hours of speculation, beginning immediately after the incident, as to whether the soldier had been taken alive or dead. The Shalit family has been informed that the army believes him to be alive.

On Oct. 7, 2000, at the beginning of the Oslo War, three IDF soldiers were killed and abducted by Hizbullah on the Israeli-Lebanese border. For over a year, they were believed to be alive - but they were in fact killed within hours of their encounter with the terrorists. In early 2004, Israel released hundreds of terrorists in exchange for Elchanan Tenenbaum and the bodies of the three soldiers.

The Red Cross has asked to see the abducted soldier. The kidnappers say they will not release any information on the soldier unless Israel pays for it in some form or other.

The dead soldiers in today's attack: Lt. Chanan Barak, 20, of Arad, and Sgt. Pavel Slotzker, 20, of Dimona.

Between two and four terrorists were reported killed in the incident, and the others returned to Gaza. Not all of them were accounted for at first, however, and the residents of the nearby communities - Kerem Shalom (adjacent to the border fence), Sufa, and others - were told to remain in their homes.

Shortly before 10 AM, the residents were told they could begin their regular daily routine, even as IDF gunfire and helicopter fire continued to be heard. At around the same time, the Palestinian Authority reported that the terrorists had returned to Gaza via the same tunnel, and would soon appear in a press conference with "good news for the Palestinian people."

The Rafah and Kerem Shalom crossings into and out of southern Gaza were not opened this morning. Rafah was closed last week for a day and a half because of Israeli intelligence warnings of an attack of this nature, but was reopened because of Arab pressure on the European Union monitors at the crossing.

A Kassam rocket was fired at Sderot this morning, causing no casualties or damage.