The Israeli government believes gunmen from Gaza are responsible for the co-ordinated attacks that targeted soldiers and civilians travelling along a highway near the Egyptian border on Thursday.
Officials said seven Israelis died in the violence that saw a bus packed with passengers, a military patrol and a private vehicle all came under attack within a three-hour period.
The passenger bus was the first target hit on Thursday, when a group of gunmen sped towards the bus and began firing.
CTV's Middle East Bureau Chief Martin Seemungal said the bus appears to have been primarily carrying soldiers when it came under attack at midday.
"The road that they were travelling along goes right along the Egyptian border and from what we understand there was a car that drove by the bus, it was kind of a drive-by shooting," Seemungal told CTV's Canada AM from Eilat, Israel.
"They got out of the car, they fired on the bus and several people were injured."
Israel's Haaretz newspaper reported that the soldiers on the bus were leaving their bases behind for the weekend. The military said the bus was travelling from Be'er Sheva to the resort city of Eilat, near the Red Sea.
Passenger Idan Kaner said the gunshots came without warning, with the unprovoked assault lasting for several minutes.
"We heard a shot and saw a window explode. I didn't really understand what was happening at first. After another shot there was chaos in the bus and everyone jumped on everyone else," Kaner told a local television station.
Seemungal said the attack drew the attention of the Israeli military, who were being lured into a trap.
"IDF forces -- Israeli army forces -- rushed to the scene and then there were some bombs that went off, some roadside bombs," Seemungal said.
"Clearly this looked like it was a co-ordinated attack to draw in the Israeli soldiers and then set off these bombs. And there was a number of deaths associated with that."
A passenger vehicle was also hit in a separate attack that also occurred near Eilat.
Israeli forces began hunting down the people responsible for the violence and subsequently killed seven of the assailants involved in the strikes in Israeli territory, according to local media outlets.
Within hours, Israeli authorities put the blame for the violence on assailants from Gaza, whom they claimed had crossed into Egypt's Sinai Peninsula before launching their deadly assaults.
"This is specific information. This is not an assessment. This is not an estimation. This is very, very precise information that they came out of Gaza. We have no doubt," government spokesperson Mark Regev told The Associated Press, without offering further details.
Israeli Defence Minister Ehud Barak said Thursday's violence raises concerns about the insecurity that exists in Egypt's Sinai Peninsula following the ouster of former Egyptian leader Hosni Mubarak earlier this year.
"The incident underscores the weak Egyptian hold on Sinai and the broadening of the activities of the terrorists," Barak said in a statement.
"The real source of the terror is in Gaza and we will act against them with full force and determination."
But a senior Egyptian security official based in Sinai denied suggestions that the assailants involved in Thursday's attack crossed the border from Egypt or fired their weapons from Egyptian soil.
"The border is heavily guarded," the official told The Associated Press, speaking on condition of anonymity.
Egypt recently moved thousands of troops into the Sinai Peninsula to deal with militants who have become increasingly mobile active since Mubarak fell from power. Authorities have blamed them for attacks on police patrols and bombings targeting a pipeline that brings oil to Israel and Jordan.
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