Under cover of fog, Palestinian militants rammed two military style vehicles packed with explosives into an Israeli cargo crossing on the Gaza border. Another Palestinian armored vehicle, apparently packed with explosives, tried to attack another border crossing but was destroyed by an Israeli missile.
The Islamic militant group Hamas, which rules Gaza, claimed responsibility for the attack.
A masked Palestinian from the Hamas military wing told a Gaza news conference that the raid was aimed at breaking Israel's crippling blockade on Gaza. He said more attacks are coming. Ten days ago, Palestinian gunmen raided a fuel depot on the Gaza border, killing two Israeli civilians.
The Israeli military believes Hamas intended to kidnap soldiers to use as bargaining chips for the release of Palestinian prisoners. Hamas is already holding one soldier it kidnapped in a cross-border raid nearly two years ago.
The attack occurred as former U.S. President Jimmy Carter held a second day of talks with exiled Hamas leader Khaled Mashaal in Damascus. Israel has condemned the meetings, saying Mr. Carter is giving legitimacy to a terrorist group.
"Hamas believes in an ongoing holy jihad against the Jewish people. They're not a partner in peace," said Israeli spokesman Mark Regev.
Saturday's raid occurred hours before the beginning of the biblical Jewish feast of Passover. Fearing more Palestinian attacks over the weeklong holiday, Israel has sealed off its borders with the West Bank and Gaza Strip.