  We present results from a 40 ks {\em XMM-Newton} observation of the X-ray
filament coincident with the southeast edge of the Centaurus A Northern Middle
Radio Lobe (NML). We find that the X-ray filament consists of five spatially
resolved X-ray knots embedded in a continuous diffuse bridge. The spectrum of
each knot is well fitted by a thermal model with temperatures ranging from
0.3-0.7 keV and subsolar elemental abundances. In four of the five knots,
non-thermal models are a poor fit to the spectra, conclusively ruling out
synchrotron or IC/CMB mechanisms for their emission. The internal pressures of
the knots exceed that of the ambient ISM or the equipartition pressure of the
NML by more than an order of magnitude, demonstrating that they must be short
lived ($\sim3\times10^6$ yrs). Based on energetic arguments, it is implausible
that these knots have been ionized by the beamed flux from the active galactic
nucleus of Cen A or that they have been shock-heated by supersonic inflation of
the NML. In our view, the most viable scenario for the origin of the X-ray
knots is that they are the result of cold gas shock heated by a direct
interaction with the jet. The lifetimes of the X-ray knots in the NML are
roughly the same as the age of the strong shock around the SW inner lobe,
suggesting they were created in the same AGN outburst. The most plausible model
of the NML is that it is a bubble from a previous outburst that is being
re-energized by the current outburst. We also report the discovery of a large
scale (at least 35 kpc radius) gas halo around Cen A.
