  The Kuiper belt is a remnant of the primordial Solar System. Measurements of
its size distribution constrain its accretion and collisional history, and the
importance of material strength of Kuiper belt objects (KBOs). Small, sub-km
sized, KBOs elude direct detection, but the signature of their occultations of
background stars should be detectable. Observations at both optical and X-ray
wavelengths claim to have detected such occultations, but their implied KBO
abundances are inconsistent with each other and far exceed theoretical
expectations. Here, we report an analysis of archival data that reveals an
occultation by a body with a 500 m radius at a distance of 45 AU. The
probability of this event to occur due to random statistical fluctuations
within our data set is about 2%. Our survey yields a surface density of KBOs
with radii larger than 250 m of 2.1^{+4.8}_{-1.7} x 10^7 deg^{-2}, ruling out
inferred surface densities from previous claimed detections by more than 5
sigma. The fact that we detected only one event, firmly shows a deficit of
sub-km sized KBOs compared to a population extrapolated from objects with r>50
km. This implies that sub-km sized KBOs are undergoing collisional erosion,
just like debris disks observed around other stars.
