IPv4 over IPV4 on the same network segment

[Benjamin Close]

Hi Folks,
   I've got to route a network over an ipv4 tunnel between to machines 
which have their parent link on the same network segment.
Everything works well except for people trying to access the external 
address of one of the link machines: ie:


  Physical   120.1.1.2 (xl0)---------------------------> 120.1.1.3 (sk0)
       Tunnel
       192.168.3.1(gif0) --------------> 192.168.0.1 (gif0)
           |                                                    |
        NET1 (xl1)                                  NET 2 (sk1)
     192.168.3.0/24                         192.168.0/24

Now anyone on net NET1 can talk to NET2 fine via a default route to 
gif0. However anyone on NET1 can't talk to 120.1.1.3 as routing tries to 
send via xl0 as it's on the same net and firewall rules prevent it.The 
default route for xl0 is gif0 with a link level route to the ip of sk0.

Anyone got an idea how to fully route xl1 via gif0? Including the parent 
physical address?


Cheers,
   Benjamin