Palestinian security said someone fired a rocket-propelled grenade at the office of Maj. Gen. Moussa Arafat in the Gaza City compound that includes the central prison and security offices.
In a statement, Palestinian security said the explosive missed its target and hit the prison, where 10 prisoners were wounded, several of them seriously. Arafat was not in his office at the time.
There is no Israeli military presence in the area. It was not known who fired the rocket. Among the prisoners are suspected collaborators with Israel, criminals and truce violators.
Meanwhile, Israeli soldiers, police and volunteers fanned out to try to find a missing soldier, and police expressed concern that he might have been kidnapped and killed.
Oleg Shaichat, 20, was in uniform and armed when he was last seen Monday by a fellow hitchhiker traveling in a car near the biblical village of Cana, on his way to his home in a nearby Jewish satellite of Nazareth, Israel's largest Arab town.
The soldier's disappearance followed the abduction of an Israeli taxi driver by militants on July 11. The cabbie was freed in a raid by Israeli commandos in the West Bank, and officials said afterward that the captors apparently operated independently of Palestinian militant groups.
The main militant groups called a temporary truce on June 29, but Israel and the Palestinian Authority are struggling to make progress on the stalled "road map" peace plan, a U.S.-backed blueprint for ending violence and establishing a Palestinian state by 2005.
Hoping to break the logjam, Palestinian Prime Minister Mahmoud Abbas was to meet with U.S. President George W. Bush in Washington on Friday and Israeli Prime Minister Ariel Sharon was scheduled to talk separately with Bush at the White House on Tuesday.
Security officials have said repeatedly they have intelligence warnings of militant intentions to kidnap Israeli soldiers. Since the July 11 cabbie abduction, the Israeli military reinstated a long-standing order forbidding soldiers from hitching rides with strangers.
Shaichat was last seen about 15 miles from the West Bank. No ransom demands or claims of responsibility, however, have been made in the case. Police say Shaichat was last seen in a car with military license plates.
"In a worst-case scenario, we assume that he got out and entered another car and maybe that vehicle was hostile," regional police chief David Ziso told Israeli army radio. "Hostile" is security shorthand in Hebrew for Palestinian militants. "It's possible he was kidnapped, or worse," Ziso added.
Despite the relative quiet since June 29, there has been sporadic violence.
On Thursday, an Arab Israeli driver was shot and killed by Israeli police after refusing to stop at a roadblock near the West Bank, police said.
The man, a Bedouin, was bringing four Palestinians from the West Bank — 3 miles from the shooting — into Israel illegally, police spokesman Gil Kleiman said. Members of the dead man's family arrived at the scene in southern Israeli's Negev desert and threw stones at police.
It was the second shooting of its kind this week. On Tuesday, Israeli police on the lookout for a Palestinian attack shot dead an Israeli Arab driver who ignored an order to pull over to the side of the road in northern Israel.
One of the issues holding up progress on the peace plan is disagreement over the security barrier Israel is building near the border with the West Bank. On Thursday, a U.S. official and a report on the Israeli Web site "ynet" said Israel might consider changing the route of the fence.
Palestinians have demanded Israel stop building the barrier, which would cut deep into the West Bank to encompass Israeli settlements. Israel argues that the fence is needed to stop suicide bombers and other militants from attacking Israelis.
The U.S. official, speaking on condition of anonymity, said the Israelis could re-examine the plan for the fence to veer into the West Bank in the center of its northern region in order to encircle the large Jewish settlement of Ariel and others.
A senior Israeli official, however, refused to discuss any possibility the plan would be altered, and he denied that the fence would be abandoned as long as there was a security threat against Israel.
"If the threat disappears one day ... then there'll probably be no need for the fence," said the official, speaking on condition of anonymity. "Right now, that is not the case."
Another important disagreement is over how to handle the estimated 7,700 Palestinians being held in Israeli jails. Israel has agreed to free about 400, but the Palestinians are demanding the release of thousands.
On Thursday, about 500 people marched in Gaza to call for the releases, hoisting photos of imprisoned relatives and shouting slogans such as, "No peace without setting free all detainees."
"The prisoners issue is the most important term of the truce and would be the main reason behind the annulment of the truce," Nafez Azzam, a senior Islamic Jihad official in Gaza, told the marchers.
Israel has refused to release anyone directly involved with attacks on Israelis. A committee of Israeli government ministers on Wednesday deferred a decision on freeing members of Hamas and Islamic Jihad until another discussion in the full Cabinet.
Israel has also argued that it would be dangerous to release many prisoners before the Palestinians begin dismantling militant groups responsible for attacks that have killed hundreds of Israelis over the past three years. Palestinians say they fear a harsh crackdown on militants would trigger civil war.