Israeli shelling killed seven Palestinians in Gaza City Wednesday after two Israeli civilians were killed in a commando raid on the Israeli border, medics said. A tank shell hit a house, leaving two dead and three wounded, the medics said. The house lies near the Nahal Oz crossing between Israel and Gaza, which was stormed by Palestinian fighters earlier, sparking a heavy gun battle. Palestinian fighters from the Gaza Strip burst into southern Israel and attacked a fuel depot, killing two Israeli civilians in a daring daylight raid that threatened to set off a new round of fighting. Another three Palestinians were killed when Israeli forces shelled a nearby house in Gaza City after the assault through the Nahal Oz crossing between the Hamas-run territory and Israel, Palestinian medics said. Another three fighters, who the Israel army said it believed were fleeing the fighting, were wounded in an Israeli air strike on a vehicle in Gaza City. “Several armed gunmen infiltrated into southern Israel through the security fence in Nahal Oz, opening fire at the kibbutz and the adjoining terminal which provides Gaza with its fuel supplies,” the Israel Defense Forces said in a statement. Islamic Jihad and another smaller armed faction, the Popular Resistance Committees, claimed responsibility for the raid at the Nahal Oz border terminal, just over Israel's border with Gaza. But Israeli government spokesman Mark Regev said Gaza's Hamas rulers were “responsible and will be held accountable.” Channel 2 TV said the infiltrators cut through the border fence to enter Israeli territory, killed two workers at the fuel terminal, and set fuel depots afire. The extent of damage to the depot was unclear, but the attack threatened to exacerbate Gaza's already delicate humanitarian situation. Plumes of smoke billowed up from the depot, the sole conduit of fuel to Gaza's 1.4 million residents. Israel cordoned off the area, and police and emergency service reinforcements were rushed there. “The Hamas attack on the fuel terminal that supplies Gaza its energy shows their total and complete disregard for the civilian population of Gaza,” Regev said. “Unfortunately, Hamas is holding hostage to its extremist and hateful agenda the civilian population of both the Gaza Strip and southern Israel.” Gaza has already been facing fuel shortages as a result of Israeli sanctions. Residents of nearby Israeli border communities hunkered down in their homes, even after the violence subsided. “The army told us not to leave our homes, not to get out of the house,” said Moran Freibach, 37, a resident of Kibbutz Nahal Oz, a farming community adjacent to the depot. __