RAFAH, Gaza Strip – Hundreds of angry Palestinian Arabs streamed into Egypt yesterday after terrorists with stolen bulldozers broke through a border wall. Two Egyptian troops were killed and 30 were wounded by gunfire in the rampage.

About 3,000 Egyptian Interior Ministry troops who initially had no orders to fire swarmed the border but were forced to withdraw about a half-mile, security forces Lieutenant Sameh el-Antablyan, who announced the casualties, said.

General Essam el-Sheikh said Egyptian forces later began firing back.

The scene was one of utter chaos. An Egyptian armored vehicle was burning, and hundreds of Palestinian Arabs could be seen crouched in farm fields just inside Egypt.

The terrorists’ rampage through the southern Gaza town of Rafah underscored the growing lawlessness in Palestinian Arab towns, especially in Gaza, and represented the most brazen challenge to the authority of Palestinian leader Mahmoud Abbas.

Earlier, the Egyptian troops fired tear gas and shot into the air. A witness said three Palestinian Arabs were injured – one seriously – when a troop carrier crushed him against a wall.

Police imposed a curfew on the Egyptian side, all shops were closed, and authorities cut electricity, plunging the scene in near total darkness.

Mr. Abbas, who has condemned the chaos, has been unable to impose order, and his failure to keep the gunmen in check is expected to harm Fatah’s prospects in January 25 parliament elections.

The rampage began late Tuesday, after Palestinian Arab intelligence arrested an Al Aqsa terrorist, Alaa al-Hams, on suspicion he and his followers kidnapped human rights activist Kate Burton and her parents for two days last week. The Burtons were among 19 foreigners abducted by Fatah gunmen in Gaza in recent months. All have been freed unharmed.

Al-Hams’ followers fired at the Palestinian security headquarters in Rafah, where he was held, briefly took over four government buildings, and then drove to the Rafah crossing, which was reopened last month after intense negotiations directed by Secretary of State Rice.

Firing in the air, they closed the entrance gate and told waiting passengers to leave. They set up an impromptu checkpoint, turning away travelers, but left the buildings and the crossing after three hours.

The terrorists then stole two bulldozers in Rafah and led an impromptu parade of hundreds of jubilant residents toward a wall a few hundred yards from the border. Five terrorists rode in the shovel of one bulldozer, while children held onto the back of the vehicle.

“We are going to do everything we can to pressure the Authority to release our leader,” an Al Aqsa activist who gave his name as Abu Hassan said.

The bulldozers smashed two holes in the towering concrete barrier at the same spot where Hamas terrorists had blasted through it during the border chaos that followed Israel’s Gaza pullout in September. Palestinian security officials had closed the earlier hole with a patch of heavy concrete blocks, but those quickly gave way before the bulldozer yesterday.

Witnesses said as many as 1,000 Palestinian Arabs rushed into Egypt, but the director of criminal investigations for North Sinai, put Egyptian Brigadier Adel Fawzi, the number at 300.

There are many divided families in the region, and some used the chaotic situation as an opportunity to reunite with relatives.

An aide to Prime Minister Sharon, Raanan Gissin, said the unchecked crossings are a violation of the agreement Ms. Rice negotiated.

Israel threatened to close the crossing in coordination with European observers if the breach is not repaired, according to a complaint sent by the Defense Ministry to America and the Palestinian Arabs, the ministry said. Israel also asked Egypt to arrest Palestinian Arabs who cross from Gaza through the breach.

Elsewhere, Palestinian Arab gunmen burst into a Rafah house early yesterday and tried to kidnap the parents of Rachel Corrie, who was crushed to death by an Israeli bulldozer in 2003 as she protested the impending demolition of a house in the southern Gaza town, according to a witness.

The five gunmen appeared to be affiliated with the Fatah movement, according to the Corries’ host, Samir Nasrallah. The gunmen eventually relented after being told who their targets were, he said. They left Gaza safely after the attempted kidnapping, Mr. Nasrallah said.

Also yesterday, Palestinian Arabs fired at least six rockets from Gaza at Israel, the military said. In consultations at the Israeli Defense Ministry, it was decided to step up attacks against militant leaders in Gaza and maintain a closure on the West Bank and Gaza at least through the weekend, banning Palestinian Arabs from entering Israel.