More than 6,000 Israelis in villages and farms arrayed near the Egyptian and Gaza borders began to return to normal on Monday after spending Sunday night under a security lockdown, due to an attempted terror attack by Sinai militants.

"After spending the night at a fortified area with nobody coming in or out, we were allowed to go on with our daily routines Monday morning," Yoav Rimon, 40, from Kibbutz Kerem Shalom, told Xinhua.

Israeli army officials notified local councils in the morning that the alert was stood down and that residents were allowed to exit their homes and shelters, and schools in the area would operate as usual.

"This is definitely an unusual incident unlike any other we've had here before, and I hope this doesn't mark a new trend," Rimon added.

The Israel Defense Forces (IDF) announcement follows a night of military patrols combing the area for remaining terrorists who first attacked an Egyptian border post, killing over a dozen of policemen, and tried to drive an armored vehicle into Israel.

The army said no more gunmen remained in the area, and announced that they had found the bodies of four militants with weapons on them, apparently killed by Israeli Air Force aircraft as they tried to flee the vehicle.

In the late night raid, dozens of masked global jihad- affiliated gunmen attacked the Egyptian outpost with rocket- propelled grenades and small arms, killing some 16 security personnel.

They then commandeered two vehicles, one of them an armored troop transport. They blew up the other truck at the Kerem Shalom crossing point, and continued across the Israeli border with the armored vehicle.

It is believed the militants planned to abduct Israeli residents or soldiers in the unprecedentedly complex attack against the two neighboring countries.

"We received an instruction to immediately enter fortified spaces, whereas usually we get a message asking us to stay nearby a fortified space," Rimon said.

When the IDF spotted the attack taking place in Egypt, they immediately placed the area under a high-security alert, and army forces and civilian security patrols closed roads and fanned out at key points to protect the civilians.

Eshkol Regional Council chief Haim Yellin said the incident was out of the ordinary.

"This is definitely a more unusual incident than any other we' ve seen here in the past," he told Xinhua.

"At first, all emergency teams in the villages were called upon and people were put under lockdown in their houses for several hours, according to instructions we received from the Home Command Front," he added.

"Although this incident is rare, unfortunately, the citizens here are used to security-related incidents and staying indoors fearing rockets or other deadly means of attack," he said.

"I'm waiting to hear from military and government officials about further information they might have about this incident and whether we have to face a new threat of infiltrations from the Egyptian border. This is definitely a big cause for concern," he added.

The food and commodities passage at Kerem Shalom that supplies Gaza remained closed on Monday following the overnight events, and Israeli security officials said they would have to reassess security arrangements along the border.