Israeli sources say it was an intelligence-gathering operation. Hamas claims it was an abduction attempt.

Either way, an Israeli lieutenant colonel and seven Hamas members were dead after the events that began around 9.30pm on Sunday, about two miles inside the Gaza Strip, near the city of Khan Younis.

An Israeli team operating in the area engaged in a firefight with Hamas, leading to more reinforcements being helicoptered in while other Israeli aircraft opened fire to cover an extraction operation.

The helicopters carried back to Israel the body of a officer identified only as “M” because of the nature of the intelligence operations in which he was involved.

On Hamas’s side, Nour Barakeh, a regional battalion commander, was killed, along with six other fighters. While Hamas claims that Mr Barakeh was the target of an abduction attempt that was repulsed by his fighters, senior Israeli officers denied that it was either an assassination or abduction operation.

Brigadier General Ronen Manelis, the IDF spokesman, refused to give any details regarding the mission’s objective but said “most of these operations end in the morning and Israeli citizens continue to sleep. In this case I’m sorry to say, some of the events are revealed.”

The timing could not have been more awkward, three days after Israel allowed $15 million (£11.7 million) of Qatari money into Gaza to be distributed to Hamas, its civil servants and its members.

The Qatari money follows a series of convoys carrying diesel fuel to enable the power plant in Gaza to operate to full capacity — again, paid for by Qatar.

It is part of a wider ceasefire brokered by Egypt and the United Nations. Only hours before the clash in Gaza, Prime Minister Binyamin Netanyahu had used a press conference he held for Israeli reporters on the side-lines of the Armistice events in Paris to strenuously defend his decision to let the money through.

Mr Netanyahu cut his visit to Paris short and returned to Israel in the early hours of Monday.

Israeli forces around Gaza are on high alert — school and rail services in nearby Israeli communities have been suspended.

But despite a few salvoes of short-range rockets towards Israel, in the first hours after the clash, the expectation is that Hamas will not jeopardise the ceasefire deal it has been pursuing energetically.