* Israeli civilian was working on Gaza security fence
* Netanyahu says Israel will respond forcefully
JERUSALEM, Dec 24 (Reuters) - A Gaza sniper killed an Israeli civilian over the border on Tuesday, Israeli military and medical officials said, in a shooting that drew a threat of possible military action from Prime Minister Benjamin Netanyahu.
The man was the first Israeli killed on the Gaza frontier in more than a year. His death comes amid heightened tensions after two suspected Palestinian attacks: a bus bombing near Tel Aviv on Sunday and the stabbing of an Israeli policeman on Monday.
No one was hurt in the blast on the bus, which had been evacuated after the bomb was spotted, and the wounded policeman was expected to recover. But the incidents, which Israel blamed on Palestinian militants, fuelled concerns of a new Palestinian uprising as peace talks show few signs of progress.
Describing the Gaza border shooting, an Israeli military spokesman said a gunman in the Palestinian territory fired at a civilian worker maintaining Israel's security fence. A spokesman at Soroka hospital in Beersheba said he died of his wounds.
There was no immediate claim of responsibility for the attack, which followed a Palestinian rocket strike on southern Israel on Sunday that caused no casualties.
"This is an extremely grave incident and we will not ignore it," said Netanyahu, who was visiting the southern town of Sderot, about a kilometre (half a mile) from the Gaza border, at the time of the shooting.
"Our policy has been to thwart (Palestinian attacks) and to respond (to them) forcefully, and that is what we will do in this case," he said, referring to the shooting, in a statement released by his office.
However, since an eight-day war in November 2012, both Israel and Gaza's Hamas Islamist rulers have been wary of taking military action that could trigger widescale fighting.
Hamas praised Sunday's bus bombing - the first in Israel in more than a year - but stopped short of claiming responsibility.
Violence in the West Bank has increased in recent months. At least 19 Palestinians and four Israelis have been killed in the occupied territory since the U.S.-brokered talks on Palestinian statehood resumed in July after a three-year break.
(Writing by Allyn Fisher-Ilan, Editing by Jeffrey Heller and Gareth Jones)