GAZA – Israeli soldiers Monday killed three Palestinian militants who had planned to blast open Israel's fenced border with the Hamas-run Gaza Strip using horses laden with explosives, the military said.

A gun battle erupted when gunmen, under cover of early morning fog, fired at an Israeli patrol near the Karni crossing on the Israeli side of the border, the Israeli military said.

An Israeli army spokesman said the militants had planned to detonate the explosives carried by the horses to blast open the border fence and then kidnap soldiers. He said the gunmen used trucks to transport the horses to the border.

At least two trucks were destroyed by Israeli tank and helicopter fire. The body of a horse killed in the battle lay beside the body of a dead gunman.

Palestinians said the militants fired anti-tank weapons and set off explosives. No Israelis were injured in the attack, the military spokesman said.

Medical workers initially reported four gunmen killed.

A Hamas radio station said at least 10 militants were involved in the attack, the most ambitious since Israel ended a three-week offensive in the Gaza Strip on January 18.

Israel tightened a blockade on Gaza in 2007 when Hamas Islamists seized the territory after routing rival Fatah forces loyal to President Mahmoud Abbas, who governs the West Bank.

As long as the border crossings are not secure there is no point in even raising the question of their opening, said Israeli Foreign Ministry spokesman Yigal Palmor.

Hamas is, by it's actions and by it's inaction causing the plight of the residents of Gaza, and this is something the Palestinians must know, he said.

Israel wants Hamas to release an Israeli soldier captured in a 2006 cross-border raid and held in Gaza since. Hamas says Israel must free hundreds of Palestinian prisoners in return for the soldier, Gilad Shalit.

Egypt is trying to broker a prisoner exchange deal between Israel and Hamas but Cairo's efforts have shown little sign of progress. It is also trying to reconcile Hamas and Fatah in unity talks that resume in Cairo next month.

(Writing by Ari Rabinovitch and Joseph Nasr in Jerusalem; Reporting by Nidal al-Mughrabi; Editing by Louise Ireland)