Aljazeera's correspondent in Palestine, Wail al-Dahduh, reporting from Gaza said Hamas' Izz al-Din al-Qassam had issued a statement claiming responsibility for attacking an Israeli military base near Nahal Oz, east of Gaza Strip.
Twelve Israeli soldiers were injured in the incident.
An Israeli army spokesman and Israeli public radio had confirmed the incident and said ten soldiers were lightly injured and two were in a serious condition.
The army confirmed the attack, but details of the incident were under censorship, according to media reports.
A number of mortar shells were also fired earlier on Wednesday at Israeli military targets in the Gaza Strip and its northern parts, al-Dahduh reported.
"One of the shells landed in Sderot area in northern Gaza Strip damaging a building in the Jewish settlement of Ghibin," he said.
"These operations came few hours after Fatah's al-Aqsa Martyrs Brigades and Islamic Jihad's al-Quds Brigades had launched a joint operation at the Erez Israeli-Gaza crossing targeting an Israeli military base," he added.
Israeli sources said they killed one of the Palestinian resistance fighters.
"However, the two organisations, al-Aqsa Martyrs' Brigades
and al-Quds Brigades have issued a joint statement, stating that communication with the fighter has been cut off and his fate is yet unknown," al-Dahduh reported.
Israeli forces killed 7 youths,
5 teenagers and an 11-year-old
Palestinian sources said these operations come in response to the escalation of Israeli military incursions and killings.
Continued Israeli incursions
While Israeli incursions continue unabated, Palestinian presidential candidate continued campaigning in different parts of Palestine.
He attempted to visit a hospital in Bait Lahya, but was unable to step out of his vehicle due to heavy Israeli tank fire nearby.
Seven Palestinian youths, including five teenagers and an 11-year-old boy, were killed on Tuesday when Israeli tanks shelled a strawberry farm while it was being harvested.
Israel says the incursions and shelling is aimed at putting an end to rockets being fired at the military, and Sharon has given his army free rein to do so.
While Abbas reacted to Tuesday's killings with a denunciation of the "Zionist enemy", he also reiterated his criticism of the use of violence by both sides.
Abbas allowed into Jerusalem
In the meantime Israel says it will allow Mahmud Abbas to campaign in East Jerusalem ahead of next week's poll, the Israeli Ha'aretz daily reported on Monday.
While Israel has allowed Abbas in-
to Jerusalem, others are harassed
Palestinians want East Jerusalem as the capital of their future state, but Israel says it is an indivisible part of its "undivided and eternal" capital and has barred Palestinian political activity there.
Other Palestinian presidential candidates have been harrassed and detained across the West Bank while some have been barred from campaigning in Jerusalem.