Eight Israelis have been killed in a string of attacks in the south of the country, prompting a series of Israeli air strikes targeting a Gaza group it said was responsible.
The bloodshed, which killed six civilians, a soldier and a police officer, took place in the desert not far from the Red Sea resort town of Eilat, prompting a wave of international condemnation led by the White House.
Within hours of the coordinated attacks, which saw gunmen ambush two buses and a car, detonate a bomb under a military jeep, and fire an RPG at another vehicle, Israeli troops had hunted down and killed seven of the attackers, a top military official said.
And shortly afterwards, Israel took aim at the Gaza-based militant group it accused of responsibility for Thursday's attacks, launching air raids that killed six in the southern city of Rafah, medics said.
Four of the dead were top members of the Popular Resistance Committees, but one was a toddler, they said. The identity of the sixth was unclear.
"If terror organisations think they can harm our citizens and get away with it, they will soon learn how wrong they are," said Israeli Prime Minister Benjamin Netanyahu in a televised address.
"We will make them pay a price, a very heavy price."
In further developments three Egyptian policemen have been killed after an Israeli plane fired a rocket near the border at militants it was tracking following the earlier attacks, security officials have said.
The official MENA news agency quoted a military official as saying that two policemen were killed when the Israeli aircraft opened fire near the Rafah border town with the Palestinian Gaza Strip.
Security officials said the incident took place south of Rafah, along the border with Israel.
They identified the Israeli aircraft as an Apache gunship that had been tracking the militants who attacked two buses, a civilian car and a military jeep.
Speaking about the earlier attacks which claimed the lives of eight Israelis Major General Tal Russo, head of the Israeli army's southern command, said the first attack saw three militants armed with explosives, guns and grenades open fire on a bus packed with passengers heading to Eilat.
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They fled the scene and shortly afterwards, detonated a roadside bomb which hit a military vehicle which was rushing to the scene of the first attack; they then managed to open fire on a second bus and a car, killing the bus driver.
In another incident, a rocket-propelled grenade was fired at cars in the area, killing five.
It was not immediately clear where the soldier was killed but the police officer, who worked in an anti-terror unit, was killed during a gunbattle which erupted alongside the border during the early evening, security sources said.
Russo said seven militants had been killed, but media reports suggested up to 20 may have been involved in the spate of attacks, some of whom were believed to have fled back into Sinai, but the military had no official comment on the number involved.
He said two were shot dead during gunbattles in Israeli territory, while a third blew himself up. Four more were killed on the Egyptian side of the border -- two shot dead by Israeli troops firing across the border, and another two shot by Egyptian forces, he said.
Cairo was not able to confirm details of the shootings, but several hours later Egypt's official MENA news agency said two Egyptian policemen had been killed near the border with Gaza in what it described as an Israeli air strike.
But the Israeli army denied there had been any new airstrike in the Rafah area.
Earlier on Thursday, a senior Israeli official, speaking on condition of anonymity, had said the attackers were Palestinians from Gaza who had reached Israel via the Sinai peninsula.
Defence Minister Ehud Barak also said the "source" of the attacks was Gaza, and vowed "to act against them with all our strength and determination" although the strip's Hamas rulers issued a statement denying any involvement in the bloodshed.
He later confirmed the air force had hit the Popular Resistance Committees, with the air force hitting several of its leaders whom the military said were behind the coordinated attacks, which were launched with the "primary objective of kidnapping an Israeli civilian or soldier."
The PRC confirmed its leader and several others had been killed in the strike, and vowed bitter revenge "against everything and everyone."
Several hours after the air strike on Rafah, the army said Gaza militants fired two rockets into southern Israel, one of which was intercepted by the anti-missile Iron Dome system.
World leaders were quick to condemn the violence, with the White House denouncing the "brutal terrorist attacks," and UN chief Ban Ki-moon expressing grave concern about an "escalation" of violence in the region.