By Jon Leyne
BBC News, Jerusalem
Sunday's Palestinian attack on an Israeli army post near Gaza and apparent capture of an Israeli soldier is the most severe test so far of Ehud Olmert's new Israeli government.
Gilad Shavit went missing during a Palestinian raid near the Gaza Strip
The Israeli Defence Minister, Amir Peretz, has warned of the extremely severe consequences if the captured soldier is harmed.
No Israeli soldier has been held hostage by the Palestinians for twelve years.
If it is confirmed that a soldier is now being held it could become a national trauma for Israel.
The Israeli army views this tactic as particularly underhand.
Ehud Olmert faces a twin dilemma. Firstly, how can he order the sort of retaliation that's already been threatened while an Israeli soldier may still be alive in Palestinian hands?
And secondly, what effect would any Israeli action have on the current international isolation of the Hamas-led Palestinian government?
Israel's first response has been to threaten the toughest possible action against the Palestinians if they do harm the captured soldier.
The incident is the most severe test yet for Olmert's government
At the same time the Israelis are pressing the Palestinian President, Mahmoud Abbas, to use whatever power and influence he has to secure the release of the soldier.
And, no doubt, Israeli intelligence is using every means at its disposal to track down the soldier so that, if necessary, a commando raid can be ordered.
But none of those courses of action guarantees success and if Israel does not secure the freedom of its captured soldier, there's the danger of a serious escalation of an already fraught situation.
All this comes just days after Mahmoud Abbas and Ehud Olmert met and agreed to hold a formal summit.
It comes also just as Hamas and the Fatah faction of the Palestinian president seemed close to narrowing their differences and agreeing on a common policy towards Israel.
This crisis threatens to sweep away those faint glimmers of political progress.