A senior Israeli official said the gunmen, unable to cross into Israel through the heavily patrolled border with the Gaza Strip, had gone into the Sinai and then infiltrated from there into southern Israel.
The U.S. ambassador to Israel, Daniel Shapiro, condemned the attack, telling Israel Radio: “We support Israel’s right to self-defence and hope those responsible for these attacks get what they deserve.”
Hamas in Gaza denied responsibility and said it would fight back if it came under Israeli attack. “We will not stand handcuffed and we will spearhead resistance to the occupation,” said senior official Salah Al-Bardaweel.
Israeli officials have voiced concern that militant groups in the Sinai have been making use of a security vacuum left by the overthrow of Egyptian President Hosni Mubarak in February.
The Israeli shekel fell against the dollar and stocks dipped on Thursday. The violence appeared to take some domestic political pressure off Netanyahu: leaders of escalating protests against high living costs called off weekend demonstrations after news of the Israeli casualties broke.
Egypt, which signed a peace treaty with Israel in 1979, recently stepped up security activity in the Sinai.
On Tuesday, Egyptian security sources said an army crackdown on armed groups in the northern Sinai had netted four Islamist militants as they prepared to blow up a gas pipeline.
Israel is building a fence along its 180-km-long frontier with Egypt, but very few sections have been completed.
Additional reporting by Yusri Mohamed in Ismailia, Egypt; Editing by Maria Golovnina