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Two Palestinian suicide bombers attacked this closely guarded Israeli port Sunday, killing 11 Israelis and wounding 18 in the first deadly assault on a strategic installation in more than three years of Israeli-Palestinian fighting.

The bombings raised serious questions about Israel's vulnerability. Police said the bombers may have been trying to blow themselves up near chemicals, causing far greater loss of life.

Israel raised its overall terror alert to its highest level after the attacks, Israel Radio reported, as police increased security at all Israeli seaports, airports and train stations.

The bombers were identified as residents of a Gaza refugee camp (search) and would be the first suicide bombers from Gaza to infiltrate into Israel during the current round of violence. The volatile coastal strip is surrounded by a fence and subject to stringent security.

After midnight, Israeli helicopters fired missiles at three workshops in Gaza City, residents said, causing damage but no casualties. Workshops are often targeted by Israeli forces, who say Palestinian militants craft mortars and rockets that are aimed at Jewish settlements in Gaza and Israeli towns and villages.

Israeli Prime Minister Ariel Sharon (search) called off a meeting with his Palestinian counterpart, Ahmed Qureia (search), that had tentatively been set for Tuesday. Preparatory talks set for Monday were also called off, a Sharon aide said.

Sunday's bombings could signal that bombers were trying to carry out a so-called "mega-attack." Many of the bombings since 2000 targeted buses, cafes and markets, where a large number of people gather, but the death toll in each attack never rose above 30. In recent months, security forces said they had stopped dozens of planned attacks every day.

"They found a weak point and they exploited it," Israeli Cabinet Minister Yosef Paritzky said. "There are many people coming and going. It is impossible to seal the entire country hermetically."

Hamas and the Al Aqsa Martyrs' Brigades, militants with links to Yasser Arafat's Fatah party, claimed joint responsibility for the attack.

Sami Pinto, a port worker, said that when he entered the port, he saw smoke from the explosions near the fence of the facility and one in a workshop inside the port.

"One of our workers who was lightly wounded told me that the terrorist came in and asked for water and the moment he showed him where there was a tap he blew up," Pinto said.

Eleven were killed in addition to the bombers, whose bodies were found near the scene of the blasts, authorities said.

Moshe Karadi, police chief of southern Israel, said the bombers were using a different type of bomb than usual and may have been trying to blow themselves up next to tanks of bromide or other dangerous chemicals stored in the port, causing far greater casualties as clouds of poisonous gas billow about. The explosions went off some way from the chemical storage area, possibly prematurely.

In 2000, Palestinians tried to blow up Israel's main fuel depot, outside Tel Aviv, setting off explosives under a tanker truck. The fuel did not ignite, but officials warned that a successful attack of that type might have resulted in thousands of casualties.

Israel TV said the explosives used in the attack were high-grade plastic explosives not used before in Palestinian attacks, possibly indicating a deadly upgrade for future operations.

All Palestinian bombers since 2000 came from the West Bank, which has a much more porous border with Israel. Israel is building a barrier in the West Bank aimed at stopping attackers, but Palestinians object to the planned route, which cuts deep into territory they claim for a future state.

The Ashdod bombers were identified as Nabil Massoud and Mohammed Salem from the Jebaliya refugee camp in Gaza. The militant groups said the attack came in response to Israeli killings of Palestinian militants.

Sharon said last month that in the absence of peace moves, Israel will implement his "disengagement plan," which includes the evacuation of Gaza Strip settlements.

In preparation for the possible withdrawal, the Palestinian Authority has drawn up a security plan for Gaza that would ban militants from carrying weapons in public, according to a copy obtained Sunday by The Associated Press.

The plan, finalized March 4 after discussions with Egyptian officials, would also leave Arafat's cousin, Moussa, as head of a new security force of 700 soldiers that would maintain order on the border of Egypt and Gaza, Palestinians security sources said.

The proposal was presented to Palestinian militant groups last week. There has been some concern that an Israeli pullback could leave a power vacuum in the volatile coastal strip and lead to chaos. Egypt also fears disorder along its border with Gaza.

The proposal, which details steps over a five-week period, would begin with a major conference of Gaza leaders to reiterate allegiance to the Palestinian Authority and call on citizens to adhere to the laws.

Since Sharon's announcement, violence between Israelis and Palestinians — and among competing Palestinian factions — has increased in battles for power in advance of the proposed withdrawal. On Sunday, Israeli forces killed three Palestinian militants near the Israeli settlement of Netzarim in Gaza, the army said. Soldiers discovered explosives on the men's bodies, according to the army.

Also Sunday, a Palestinian court ordered the release of four Palestinians who had possible links to the bombing of a U.S. diplomatic convoy that killed three American security guards, Palestinian security sources said. The judge cited lack of evidence.

The four had been arrested several weeks ago and charged with manslaughter for planting bombs aimed at Israeli tanks that might also have hit the convoy in October.

However, U.S. diplomats and even Palestinian security sources questioned whether the men were the real culprits. Some Palestinian officials said the real perpetrators of the October attack could be linked to Arafat's own Fatah organization, or even to the security forces.

Hours after the court order, the men had still not been freed.

The attack on the convoy was the first on a U.S. target in more than three years of Israeli-Palestinian fighting.