"These accusations are an attempt to distract from the Israeli domestic crisis," Hamas spokesperson Taher al-Nunu told the AFP news agency, referring to recent cost-of-living protests in Israel.
Hamas has ordered the evacuation of many facilities, including police headquarters, in anticipation of Israeli reprisals.
"The source of the terror incidents is Gaza and we will act against them with all our strength and determination," a statement by Barak declared earlier.
It also lashed out at the post-Mubarak Egyptian government.
“The incident reflects the weakness of the Egyptian hold on Sinai and the expansion
of activity there by terror elements," it said.
Media reports said seven Israelis were killed in three separate attacks near the Red Sea resort of Eilat. Medical staff reported 25 wounded.
In the first incident gunmen fired on a bus, wounding nine people. A remote-controlled bomb then hit a military vehicle that had come to the rescue.
Later a rocket-propelled grenade hit a vehicle.
Seven of the attackers were killed, according to the Israeli military.