Palestinian militants have captured an Israeli soldier during a raid on an army post near the Gaza strip, the Israeli military has said.
It is the largest attack since Israeli troops left Gaza
The man went missing during an attack on an Israeli tank which killed two of its crew, a military spokesman said.
Hamas said it had knew nothing about the soldier, but urged any captors to keep him alive and treat him well.
Israel said it would do everything in its power to retrieve the soldier, the first to be captured since 1994.
The missing man was the gunner on a tank attacked in a pre-dawn raid by militants from a 300 metre tunnel under the Gaza border fence near the Kerem Shalom crossing, Israeli military officials said.
They named him as Corporal Gilad Shalit, 19, the Associated Press reported.
Seven or eight gunmen lobbed grenades at the tank and an empty armoured personnel carrier, the military said.
The raid has been claimed by the military wing of the ruling Hamas party, Ezzedine al-Qassam, the Popular Resistance Committees and a group calling itself the Army of Islam.
At least two Palestinian fighters were also killed in fighting during the assault.
Palestinian militants initially said they had the body of the missing soldiers, but Israel later said it believed the man was alive.
"Hamas is involved in this matter from head to foot, literally," Israeli army chief of staff Dan Halutz said. "The soldier is alive, and therefore they bear responsibility for his fate."
Hamas, which recently declared an end to an unofficial truce with Israel, said the operation was a response to recent deaths of civilians and the targeted killings of two militant leaders.
But it said it only knew of the apparent capture of the soldier from Israeli reports.
"We are calling on the resistance groups, if they do have the missing soldier... to protect his life and treat him well," said spokesman Ghazi Hamad, speaking in Hebrew at a press conference.
"We urge Israel not to go towards an escalation," he said.
The BBC's Alan Johnston in Gaza says the assault on the border post marks a very serious escalation particularly because it involved Hamas.
He says Gaza is braced for an Israeli military response.
"This was a very serious Hamas terrorist attack," said Israeli Prime Minister Ehud Olmert in a media interview.
He said Israel saw the Palestinian Authority headed by President Mahmoud Abbas, and the Hamas-led Palestinian government, as "responsible for the incident, with all that implies".
Israeli helicopters and troops have pushed into the area
Mr Olmert was to meet with top security officials to discuss a response, and was to hold an emergency cabinet meeting, the Associated Press reported.
Israeli Defence Minister Amir Peretz said Israel would "take revenge against anyone who injures the soldier, including their leaders".
Mr Abbas issued a statement condemning the incident and called on the international community to prevent Israel from "exploiting the attack to carry out large-scale aggression in the Gaza Strip".
Hours after the raid dozens of Israeli tanks, backed by helicopter gunships, pushed into the Gaza Strip.
Hamas, currently the governing Palestinian party, ended an informal ceasefire with Israel earlier in June following the deaths of eight members of a Palestinian family on a Gaza beach.
Hamas blamed the beach explosion on shelling from an Israeli warship, a charge Israel has denied.
Close to 20 Palestinian civilians have been killed in Gaza in recent weeks as a result of the Israeli air force's efforts to target militants from groups like Hamas, our correspondent says.
The attack is the largest operation of its kind since Israel withdrew its troops and settlers from Gaza last summer.
Hamas was to continue talks on Sunday with the rival Palestinian Fatah faction to try to end their power struggle and form a united front.