Military spokesman Lieutenant Colonel Jonathan Conricus said the mile-long tunnel ran underneath the Kerem Shalom border crossing, Gaza's main point of entry for humanitarian aid.
The tunnel was reported to be 1.5 km long (about one mile), and going down 80 meters (260 feet), underneath the Kerem Shalom border that crossed into Israel and then flowed into Egypt. Conricus also said that the tunnel could have also been utilized for the goal of transferring terrorists from Gaza to Egypt, from where the targets could have been killed.
But Lt Col Conricus said this did not mark "more of the same" since it involved the most advanced technological means Israel has deployed.
The Israel Defence Forces (IDF) said on Sunday it had destroyed a border-crossing Hamas attack tunnel - the third in recent months - that penetrated hundreds of meters into both Israeli and Egyptian territory from the Gaza Strip, in an airstrike on Saturday night.
According to military correspondent Yossi Yehosua, the Hamas tunnel has been newly dug, and not yet in use.
Although they did not manage to reach civilian areas, the infiltrations caught Israel off guard, killing five soldiers in one attack, and terrified the local population. Every day roughly 500 trucks, carrying goods from the West Bank and Israel, pass through it and into the coastal enclave, Israeli newspaper Haaretz said on its website.
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The tunnel was destroyed by ground forces overnight, after an initial air attack demolished part of it inside Gaza.
"There are those who say the Israeli military attacks sand dunes - that is incorrect", Prime Minister Benjamin Netanyahu, addressing criticism from lawmakers who have called for a stronger armed response, told reporters after the tunnel was targeted.
The attack came shortly after the military announced it would not be opening the Kerem Shalom Crossing into the Gaza Strip on Sunday, following a "situational assessment".
The tunnel stretched a total length of around a kilometre and a half, he said. "Hamas must understand that we will not permit these attacks and we will respond with even greater force".
Israel has been constructing a sensor-equipped underground wall along the 60-km (36-mile) Gaza border, aiming to complete the $1.1 billion project by mid-2019.