The Gaza fuel depot is the sole conduit of fuel to Gaza's 1.4 million residents, a humanitarian hub where Israeli workers help deliver essentials to the impoverished Palestinian area.

But on Wednesday four militants hopped over the border into the depot and under a cover of mortar fire shot dead two Israeli civilians. The brazen daylight raid in southern Israel threatened to set off a new round of fighting after a monthlong lull.

The Israeli government said it held Gaza's Hamas rulers responsible for the attack and sent tanks, troops and aircraft into the Palestinian territory. The violence, which left at least nine Palestinians dead, could jeopardize recently renewed peace efforts and the supply of fuel to Gaza.

Maj. Tal Levram, an Israeli army spokesman, said troops arrived within minutes and killed two of the attackers, while two others escaped. He said the militants apparently were planning to stage a broader attack on a neighboring Israeli village or to kidnap a soldiers, but were thwarted by the army.

"It could have been much much worse," he said.

Residents of nearby Israeli border communities hunkered down in their homes, even after the violence subsided. There were sporadic mortar attacks into the evening. One shell heavily damaged an Israeli home, another landed about 100 meters (yards) from news reporters, and the army said one soldier was lightly wounded in the hand by Palestinian sniper fire.

"The army told us not to leave our homes, not to get out of the house," said Moran Freibach, 37, a resident of Kibbutz Nahal Oz, a farming community adjacent to the depot.

Islamic Jihad, a violent group backed by Iran, and two smaller militant groups claimed responsibility. Islamic Jihad spokesman Abu Ahmad called the raid a "unique and complicated operation."

Israeli airstrikes targeted militants late into the night, killing at least seven others in Gaza.

Palestinian militants frequently attack the Israeli border, but they rarely succeed in getting through.

In December, two militants were gunned down by Israeli troops after infiltrating Israel and attacking an army base. In the most serious attack, militants tunneled into Israel in June 2006, killed two soldiers and captured a third. The soldier, Cpl. Gilad Schalit, remains in captivity in Gaza.

Tuesday's attack upset a recent period of calm following a broad Israeli military offensive that killed more than 120 Palestinians, including dozens of civilians. Since the offensive ended in early March, Egypt has been trying to mediate a cease-fire between Israel and Hamas, and the sides appear to have been honoring an informal truce.

Israeli economic sanctions, which have caused widespread shortages of fuel, electricity and basic goods, have hit the area hard. On Tuesday, Hamas threatened to blow up Gaza's borders with Israel and Egypt to relieve the strain. Israel has taken the threat seriously because Hamas breached the Egyptian border last January, allowing tens of thousands of people to pour into Egypt for more than a week before the border was resealed.

Defense Minister Ehud Barak said Hamas was "responsible for the attack and will be held accountable."

Barak has repeatedly threatened a broad offensive into Gaza if attacks persist.

Though not directly involved, Hamas has maintained a firm grip on power since violently taking over Gaza and most likely could have prevented Wednesday's attack. Fawzi Barhoum, a Hamas spokesman, praised the attack as "heroic and courageous."

The group could have its reasons for seeking a resumption of hostilities. It has expressed impatience with Egypt's failure so far to forge a cease-fire and repeatedly accused the world of ignoring the plight of Gazans. A new round of fighting would draw attention to Gaza.

Islamic Jihad said the attack sent a message "that the Palestinian people will not be patient and will direct their anger against the siege toward the Zionist enemy."

The infiltration also serves as a reminder that Israel, which is conducting peace talks with the rival Palestinian government of President Mahmoud Abbas, won't be able to implement a deal without Hamas' consent. Hamas might also be interested in disrupting Israel's upcoming celebrations marking 60 years of independence.

Abbas rules from the West Bank and wields little influence in Gaza, where his forces were routed by Hamas during last year's takeover. His government said Wednesday's raid would harm peace talks and make life more difficult for Gazans.

Israeli Foreign Ministry spokesman Arye Mekel said the raid would not affect peace talks, which resumed in earnest this week with a summit between Abbas and Israeli Prime Minister Ehud Olmert.The two sides hope to reach a final peace deal by the end of the year.

"We decided that we will continue to talk and will not let terrorists have a veto voice on the talks with the pragmatic forces," Mekel said.

The depot that was attacked is the sole conduit of gasoline to Gaza. Plumes of smoke billowed up from the depot, though officials said there was no serious damage to the facility. As part of its sanctions on Hamas, Israel has reduced the flow of fuel to Gaza, causing heavy shortages and rationing.

Mekel said the attack would only cause further harm to civilians by threatening the flow of fuel and other humanitarian supplies to Gaza.

"Israel sends food, gas, medical supplies and humanitarian assistance every day and the terrorists who attacked the crossing today are trying to harm this operation and are harming mostly the well-being of the people," he said.

In neighboring Egypt, troops went on alert earlier Wednesday, fearing Hamas militants may attempt to forcibly breach its border as they did in January.

In separate violence, a Hamas militant and an Israeli soldier were killed in clashes in southern Gaza.

Last week, an aide to Israel's public security minister was wounded by a Palestinian gunman as he and the minister toured an observation point overlooking Gaza with a group of Canadian tourists.

Wednesday's raid came at the tail end of a five-day nationwide civil defense drill, meant to test Israel's response to war and other emergency situations.