The Gaza incursion came amid international appeals for restraint over the kidnapping which has triggered the worst Middle East crisis since the militant Islamist movement Hamas took office in March.
It also presented the first major security challenge for Olmert since he took office in May pledging to unilaterally redraw the map of Israel even without negotiations with the Palestinians.
Egypt, France and the Vatican, as well as key Israeli ally the United States, sought to exert pressure on the Palestinians to hand over the soldier.
Israel said it concentrated its forces a few kilometres into southern Gaza where it believed Shalit was being held, including the area of Dahaniyeh near the destroyed airport.
"We have no immediate plans to go deeper in. That could change but that’s the situation right now," an army spokesman said.
At one point troops were attacked by light arms fire and possibly an anti-tank missile, but there were no reports of any casualties, he said.
