This man was just outside the crossing at the time: "I heard a big explosion, and from the explosion ricochets hit my truck. It sounded like gravel, and black smoke rose over the terminal, followed by a smaller explosion, which was followed by another explosion bigger than the first one, and then there was shooting."
Three militant groups claimed joint responsibility for last night's attack.
One is Hamas; another, the Al-Aqsa Martyrs' Brigades, is the armed wing of the ruling Fatah movement of the Palestinian Authority's new president, Mahmud Abbas, also known as Abu Mazen. The Popular Resistance Committee is the third militant group.
The attack is seen as an act of defiance against Abbas, who has repeatedly spoken out against such violence.
It's also seen as an attempt by militant groups to portray Israel's planned withdrawal from Gaza as a retreat under fire.
In response, Israel closed its border crossings with Gaza and repeated that Abbas must rein in the militants. According to Israeli Foreign Ministry spokesman Daniel Taub, "The choice to Abu Mazen has never been clearer: Are you going to help the terrorists or are you going to help the Palestinian people?"
The attack came amid hopes for a new window of opportunity for the stalled peace process, following Abbas's election on 9 January.
Earlier yesterday, United Nations Undersecretary-General Kieran Prendergast spoke to the Security Council.
"There is a palpable sense of expectation of real, substantial and sustainable change in the region. Optimism has, at least for now, replaced long and bitter years of disillusion, despair, and hopelessness. The potential is there. But so is the danger that the fragile new process might falter and fail. We must not let that happen," Prendergast said.
Abbas has said he will not use force against militants. Instead, he is expected to try to co-opt them and get them to agree to a cease-fire.
Daniel Levy is a former Israeli negotiator who helped draft the Geneva Accord, an informal Mideast peace initiative. He says the attack is a blow to Abbas, but notes that it may be an inevitable part of the process.
"Painful as it is and, of course, I completely condemn the attack, [but] in a way, one can see it as part of that negotiation [with militants], and them saying, 'It's not going to be so easy to bring us on board, and you can't buy us off cheap,'" Levy said.
But he says Israel must do all it can to support Abbas in his efforts.
"If he can show to his people that his path of nonviolence and of talking to the Israelis delivers results, delivers the removal of checkpoints, delivers less Israeli intervention, delivers further withdrawals, delivers serious negotiations, then it will be more easy to swing the Palestinian public behind him, to isolate the militants and get them either to agree to a cease-fire or [make it easier] to be able to confront them," Levy said.
Israeli Justice Minister Tzipi Livni told Army Radio on Friday that Israel must "try to strengthen" Abbas in his effort to control what she called "terrorist organizations."