Serious escalation

In what is considered to be a serious and dangerous escalation of the war situation between the PA and Israel on Sunday the Palestinians mounted a major attack on an Israeli post, the Kerem Shalom crossing point in southern Gaza. Eight terrorists from three factions (the Popular Resistance Committees, the Hamas Military wing Izzadin al-Kassem and a new group called the Islamic Army) used a deep tunnel that had taken months to dig under the sand, undetected by the IDF, and entered Israeli territory. They then split into three groups and carried out a sophisticated coordinated attack on IDF positions.
Two Israeli soldiers were killed and several wounded. One of the wounded soldiers, Cpl. Gilad Shalit, 19, was kidnapped. Hamas has issued a statement that he was badly wounded in his abdomen and chest, but he is alive and being given medical treatment. They say they will exchange him for Palestinian security prisoners. Four of the gunmen were killed, but the rest escaped back to Gaza.
Defense Minister Peretz said that the terrorists would "pay a painful price" for this attack, but he has made statements like that before without doing anything, hence the terrorists did not fear to attack (this is the well known "crying wolf" syndrome). PM Olmert said that he holds the PA responsible for this attack, and certainly it could not have been carried out without the knowledge of the Hamas Government. Commander of the IDF Dan Halutz said that all Hamas operatives are targets for retaliation, opening the door to targeted killings and or capture of Hamas Government officials. Meanwhile Pres. Abbas of the PA called the attack "intolerable," which does however show how little control he has over the actual situation. Meanwhile his talks with Ismail Haniyeh, the Hamas PM, have failed to reach agreement after weeks of talks, that continue fruitlessly on a daily basis.
Abbas called representatives of the terrorist groups involved in the attack to his office to inform them that he had received an ultimatum from PM Olmert, that either they turn over the soldier alive to Israel within hours or the IDF will mount a major attack into Gaza.
This attack brings the intentions of Hamas and the Palestinians out into the open. They have used the rocket attacks on Sderot as an opening gambit in their plan to escalate warfare with Israel. Although terrorism was being carried out almost daily, no organized military attacks have been carried out by combined terrorist groups for years. This attack represents the results of careful training and the introduction into the PA of sophisticated weapons through the Rafah crossing from Egypt. While Abbas shakes hands with Olmert, they both know that Hamas/Izzadin al-Kassem are training a Palestinian Army to confront the IDF.
Now that the terrorists have kidnapped a soldier the situation is delicate, since his life is on the line, and the Government does not want to act unless he is safe or they know his whereabouts. But, the only response to this kind of direct military attack is a counter-attack that is sufficeintly severe that the Palestinian factions will stop and think many times before they mount another such attack. Military correspondents have given their opinions, that first this is the fruit of the IDF's withdrawal from Gaza, and their lack of detailed intelligence on what is happening there, and second that not to counter this attack with a painful counter-attack would be an invitation for more such attacks.
So the election of Hamas as the PA Government and the withdrawal of the IDF from Gaza has resulted in a worse military situation that can be expected to fester until the IDF can reverse the consequences of these events. The latest news is that an IDF force has in fact entered Gaza "in strength."