Three Israeli soldiers and a member of Egypt's security forces were killed on Saturday in a rare exchange of fire near the border between the two countries, official sources from both sides said.
The Israeli army said an Egyptian assailant shot dead two soldiers "in the early morning... while they secured a military post at the Egyptian border" on Mount Harif, near the town of Mitzpe Ramon in the Negev desert.
The discovery of their bodies triggered a manhunt during which the third soldier was killed.
An army statement identified the assailant as an Egyptian policeman, saying he was killed by Israeli troops after being found "in Israeli territory".
The statement said an investigation was being carried out "in full cooperation with the Egyptian army".
A fourth Israeli soldier, a non-commissioned officer, was lightly wounded and evacuated to hospital, the military added.
An Egyptian army spokesman said "a member of the security forces... chased drug smugglers. During the chase, the security agent crossed the security fence (border)" and an exchange of fire took place.
Egypt was the first Arab country to make peace with Israel following the Camp David accords of 1978, though there remains widespread popular opposition towards normalisation in Egypt. (AFP)