Israel's prime minister has promised prolonged and extensive military action to free an Israeli soldier missing and presumed held captive in southern Gaza.
The soldier's disappearance is being treated as a crisis for Israel
"Let it be clear: We will reach everyone, no matter where," Ehud Olmert said in a speech in Jerusalem.
An Egyptian team trying to secure the release of Cpl Gilad Shalit, 19, says it has made contact with his captors.
No Israeli soldiers have been seized by Palestinian militants since 1994 and it is being seen as a crisis in Israel.
Members of the Palestinian government, led by militant group Hamas, are continuing talks with Palestinian Authority President Mahmoud Abbas, who has condemned the soldier's capture.
Hamas political leaders have denied any knowledge of the abduction but have called for the soldier's release unharmed.
The soldier is thought to have been seized during a guerrilla attack on an Israeli guard post outside the Gaza Strip on Sunday.
Mr Olmert said he had instructed army chiefs to be ready for "a prolonged and extensive military operation in order to strike the terror organisations and commanders".
He said he held senior officials in the Palestinian Authority including Mr Abbas and Prime Minister Ismail Haniya of Hamas responsible, with "everything that it implies".
Israel has massed troops on the border with Gaza in preparation for any retaliatory operations after the dawn assault on Sunday.
Cpl Shalit was the gunner on a tank attacked in a pre-dawn raid by militants from a 300-metre tunnel dug under the Gaza border fence near the Kerem Shalom crossing, Israeli military officials said.
Seven or eight gunmen lobbed grenades at the tank and an empty armoured personnel carrier, the military said.
The 19-year-old had been in the army 11 months
Two other members of the tank crew were killed in the raid, Israel's army said in a statement, and at least two Palestinian militants were also killed.
The raid was claimed by the military wing of the ruling Hamas party, Izzedine al-Qassam, the Popular Resistance Committees and a group calling itself the Army of Islam.
But no group has said it is holding an Israeli soldier.
Hamas fighters said the operation was a response to recent deaths of civilians in Israeli attacks and the targeted killings of two militant leaders.
Israeli tanks pushed into the Gaza Strip after the attack and on Monday morning blew up the tunnel, sending a thick plume of black smoke into the air.
Cpl Shalit's father has spoken on Israel radio to call on the captors to look after his son.
"We believe that all the kidnappers, all those involved in the kidnapping have families and know how we feel in this situation," Noam Shalit said.
Palestinian prisoners' families want Shalit as a bargaining chip
Meanwhile, families of some 9,000 Palestinians held in Israeli jails demonstrated to demand that the militants holding Cpl Shalit trade him for the release of their relatives.
An Egyptian team is in Gaza trying to secure the soldier's release.
They were quoted by Israel radio saying that they had made contact with Cpl Shalit's captors through a third party, and were offering to provide medical assistance for the soldier, who is thought to have been wounded.
Hamas ended an informal ceasefire with Israel earlier in June following the deaths of eight members of a Palestinian family on a Gaza beach.