Seven Israelis were killed in a string of coordinated attacks in southern Israel on Thursday which Israel said were carried out by militants from Gaza and warned it would hit back hard.

The Israeli army said two attacks had taken place on route 12, a desert road next to the Egyptian border, near the Red Sea resort town of Eilat.

In the first incident, gunmen strafed a bus. In the second, an improvised explosive device detonated when a military vehicle carrying Israeli troops drove over it.

Security sources revealed a third incident on another desert road near the Jordanian border, in which an RPG was fired at a car near Beer Ora, some 15 kilometres (nine miles) north of Eilat.

Medics said all seven victims died in that attack, at least four of whom were travelling in the same car, with reports also suggesting there was mortar fire in the same area.

An Israeli army spokeswoman described the incidents as a 'combined terrorist attack' and said at least nine people were injured when gunmen ambushed bus 392 it drove south along route 12.

Shortly afterwards, 'several people were injured as a result of an explosive device detonated at an Israel Defence Force that arrived at the scene and drove over it', she said.

There were also unconfirmed reports that an anti-tank missile had been fired into Israel from across the border in Egypt.

Security sources initially said that gunmen in a car had opened fire a bus, and suggested the attackers may have fired from the Egyptian side of the border. But the Israeli army later said 'everything took place in Israeli territory'.

The bloodshed sparked a massive manhunt for the killers and at one stage Israeli troops staged a running gunbattle with the militants, which left seven of the gunmen dead, security sources said.

However, troops maintained a lockdown on the area as they scoured the region for any others who had managed to flee.

There was no immediate information about the identity of the attackers, although one senior Israeli source said they had infiltrated from Egypt.

As the hunt continued, the Israeli government pointed the finger at the Gaza Strip, saying they had concrete information showing the killers came from there.

"The source of the terror incidents is Gaza and we will act against them with all our strength and determination," Defence Minister Ehud Barak said in a statement, in which he also criticised Egypt's hold on the Sinai peninsula.

"This is a very serious terror incident at a number of locations. The incident reflects the weakness of the Egyptian hold on Sinai and the expansion of activity there by terror elements," he said.

Israeli Prime Minister Benjamin Netanyahu called the attacks 'very serious' in a statement released by his office.

"We are talking about a very serious incident in which Israelis were hurt and Israel's sovereignty was damaged," he said.

Netanyahu's spokesman Mark Regev said Israel had 'concrete information' the attackers had come from Gaza.

"We have specific and concrete information that these terrorists who killed Israelis today came from the Gaza Strip," he told AFP.

"This is not speculation. This is evaluation; this is analysis; this is concrete information."

Another Israeli official, speaking on condition of anonymity, said the attackers had entered Israel from Sinai which they had cross into from Gaza.

In light of the bloodshed in the south, Israel issued a travel warning urging its citizens in Sinai to return home immediately.

But Egyptian security sources denied that Palestinian militants had slipped past their patrols into Israel, and the governor of northern Sinai challenged Israel to provide evidence that the attacks originated from Egypt.