The optical/IR counterpart of the 3 July 1998 gamma-ray burst and its evolution

We imaged the X-ray error box of GRB 980703, beginning 22.5 hours after the gamma--ray event, in both the optical R and near-infrared H bands. A fading optical/IR object was detected within the X-ray error box, coincident with the variable radio source reported by Frail et al. (1998a), who also detected the optical transient independently of us. Further imagery revealed the GRB host galaxy, with R = 22.49 +/- 0.04 and H = 20.5 +/- 0.25, the brightest so far detected. When excluding its contribution to the total flux, both the R and H-band light curves are well-fit by a power-law decay with index alpha~1.4. Our data suggest an intrinsic column density in the host galaxy of ~ 3.5 x 10^21 cm^-2 which indicates the existence of a dense and rich-gas medium in which the GRB occurred, thus supporting the hypernova model scenarios.