Israeli defence minister, Ehud Barak, has said Palestinian terrorists are behind three attacks in Israel today, which has left five people dead.
During the first attack, shots were fired, reportedly from the Egyptian side of the border, at an Egged civilian bus travelling from Shizafon to Eilat, in southern Israel.
Seven casualties were treated by Magen David Adom medics and taken to Yoseftal Hospital in Eilat. Five of the wounded were suffering from gunshot wounds and their condition was declared moderate.
The Israel Defence Force (IDF) confirmed that five soldiers were among those injured in the attack.
While the medical teams were evacuating the wounded, additional reports came in of a second incident on the same road.
This attack, on another vehicle, involved a roadside bomb. An MDA spokesman confirmed that five people were killed at the scene and several others injured.
The third event involved an exchange of fire between IDF soldiers and the terrorist squad, where the seven terrorists were killed.
Avital Leibowitz, an IDF spokesman, told the JC: "We are looking at a combined terrorist attack which has infiltrated Israel from Gaza."
The IDF is transferring numerous forces to southern Israel, among them the counter-terrorist unit, military helicopters and patrols.
Following the attacks, Mr Barak said: "The event reflects the weakening of the Egyptian hold on Sinai and the expansion of terrorist action in the area.
"The source of the terror acts is Gaza, and we will act against them with full force and determination."
Informed speculation in the UK intelligence community suggested that the attacks may well have been masterminded by an al-Qaeda cell infiltrating from Sinai. The intelligence maintained that the attacks were beyond the capability of Hamas.
Zionist Federation chairman, Harvey Rose, said: "This cowardly attack once again shows the constant threat of terrorism that Israel faces. My thoughts are with the family and friends of those hurt and killed."
James Clappison MP, the parliamentary vice-chair of Conservative Friends of Israel, said he was shocked to hear of the attack. "It's especially shocking after so many peaceful years on the Egyptian-Israeli border, to see reports of gunmen - some of them wearing Egyptian uniform - launching an unprovoked attack and thereby raising questions about security on the Egyptian side of the border."
Alistair Burt, the FCO Minister for the Middle East, said: "I condemn these appalling and senseless acts of violence.
"As efforts for peace in the region continue, this brutality has no place, nor its perpetrators any excuse. My thoughts and prayers are with those killed and injured and I offer sincere condolences to their families and friends."
Vivian Wineman, President of the Board of Deputies said: "This atrocity re-emphasises the need for all people of the region to reject extremism, embrace negotiation and find a durable peace. My thoughts and prayers are with the victims, their families and all the people of Israel."
Abraham Foxman, national director of the Anti-Defamation League, said: "The especially troubling new element in this attack is that the perpetrators apparently exploited the reduced presence and attention of Egyptian security forces in the Sinai region to gain access to Israel.
"This development highlights the new security dynamic confronting Israel in a changing Middle East. Israel has no choice but to once again respond to wanton terror attacks on its soil in order to protect Israeli civilians and deter terrorists."