The explosive-filled tunnel was intended to kill, or to try kidnap soldiers and was one the largest that Israeli forces had seen in years, said Lt. Col. Avital Leibovich in a late-night call with reporters.
"We definitely see it as a very severe event. The amount of explosives were very big," Leibovich said. "A kidnapping attempt is a possibility. Killing soldiers is a possibility."
She said one soldier was lightly wounded and a military vehicle was blown away some 65-feet (20 meters). It was not clear how many soldiers there were; how far they were from the blast, nor how many kilos of explosives were detonated.
The spokeswoman said military officials would convene Friday to discuss their response.
Fighters of the Islamic militant group Hamas, which rules Gaza, claimed responsibility on their website, saying the blast was caused by a roadside bomb.
The Qassam Brigades said the blast came in response to the death of an 11-year-old boy earlier in the evening. A health spokesman, Kamal Mousa, said Humeid Abu-Daqa died after a bullet in the same area hit him.
It was not clear who shot the boy. Palestinian militants and Israeli forces were exchanging fire at the time.
Leibovich said the tunnel was 16-feet (5 meters) wide and 13-feet (4 meters)
The tunnel's mouth ended at the fence near the southeast Gaza village of Farahin, an area where militants have detonated three improvised explosive devices blew up next to soldiers in separate incidences in the past two weeks.
At least one was severely wounded in blast in late October.
Before the blast, Israeli soldiers had entered dozens of meters into Gaza, protected by military helicopters firing a cover of bullets to search for explosives, Leibovich and Palestinian officials said.
The military spokeswoman said the incident occurred after the soldiers withdrew and were doing "technical work" on the border fence. She said it wasn't clear if somebody detonated the explosives or whether they were accidently triggered.