Israel immediately sent tanks and soldiers a short distance into Gaza to locate the tunnel and destroy it. Though the target at Kerem Shalom had been a military one, Israeli Prime Minister Ehud Olmert and other officials labeled it a "terrorist" attack that demanded the sternest of responses. All Palestinian leaders would be held accountable, he declared, and no distinction would be made between military and political wings of parties such as Hamas. "Let it be clear," said Olmert, "We will reach everyone, no matter where they are, and they know it."
The Prime Minister, his cabinet, and senior military officials reportedly mapped out several possible military actions, including air strikes against militant targets, assassinations of Hamas political leaders — up to and including Prime Minister Ismail Haniyeh — and the reoccupation of Gaza. While troops and tanks are massed at the edge of territory, however, the plans are on hold while intermediaries, including Palestinian and Egyptian officials, try to negotiate the release of Cpl. Shalit.
Palestinian President Mahmoud Abbas, embroiled in his own power struggle with Hamas, denounced the attack as ill-considered and counter-productive, saying it both "violated the national consensus" and potentially offered Israel "a pretext to launch a widespread military operation." What happens next may depend on the fate of Cpl. Shalit. Numerous countries are lobbying Palestinian leaders to do everything they can to secure his release, with Egyptian representatives apparently playing a key role. Several senior officials of the Hamas government have publicly called for Shalit to be released unharmed. The militants holding the young soldier have said they are tending to his wounds and that he's being treated well, but they appear to be following the in tradition of Hezbollah in Lebanon by demanding extensive prisoner releases as the ransom for a captive Israeli.
The attack also appears to have been aimed at disrupting efforts to find a new consensus between Abbas and the Hamas government over negotiations with Israel. Abbas and Prime Minister Haniyeh are reportedly near agreement on a negotiating position that would imply recognition of Israel inside its 1967 borders. Although Hamas has until now refused to recognize Israel's legitimacy, its political wing is looking to break the international blockade on funding to the Palestinian Authority since it assumed power. A senior Hamas official told Time, "The attack [at Kerem Shalom] must also be understood as an attack on Haniyeh and the negotiations with [Abbas]." The involvement of Hamas's military wing suggests a widening rift within Hamas, with the political leadership in Gaza and the West Bank led by Haniyeh on one side, and the military wing and Hamas leaders based in Syria on the other.
Israeli leaders, however, are skeptical of distinctions between different wings of Hamas, and are under strong domestic pressure to retaliate. Opposition leaders lambasted the government for its failure to stop the rocket attacks, while other critics targeted the security establishment for its failure to sniff out the plan.
Threatening Hamas leaders is not enough for some Israelis. Senior military figures have repeatedly floated the idea of invading Gaza, an option Defense Minister Amir Peretz is loathe to embrace because it would mean reoccupying hostile territory without resolving the causes of the conflict. "They could go in," says Galia Golan, Professor of Government, Diplomacy and Strategy at the Interdisciplinary Center in Herzliya, "but how would they get out?" Golan believes that Defense Minister Peretz, leader of the Labor Party, sees a negotiated political solution as the only chance for long-term stability. That's a difficult argument to sustain in the current climate of hostility, in which violence is escalating. While Shalit's family waits nervously to learn of his fate, Israelis and Palestinians are wondering whether they are nearing the brink — or already past it.
--With reporting by Jamil Hamad/Bethlehem