The photonuclear reactions 16 0(7,n) 15 0 and 16 0(7,p) 15 N are simultaneously described within a coupled channels framework based on a continuum shell model formulation that includes all nonlocalities arising from antisymmetrization. This large-scale conventional many-body calculation provides a good description of the medium energy data. The inclusion of A(1232) degrees of freedom further, but slightly, improves the description of the available data. Complete quantitative agreement, however, is still lacking.PACS numbers: 25.20.Lj, 24.10.EqThe apparent inability to describe and understand fully photonuclear reactions below 400 MeV using conventional, nonrelativistic dynamics has attracted growing theoretical and experimental interest. This theoretical shortcoming has motivated many calculations that have separately investigated different mechanisms thought to be important, such as nucleon-nucleon correlations [1,2], relativistic equations of motion [3][4][5], meson exchange currents [6-9], and excitation of A(1232) resonances [10,11]. Despite such efforts, the available (7,p) data [12-14] below 400 MeV are described at best only semiquantitatively, while the computed (7, n) cross sections [15] are not even qualitatively described. The purpose of this Letter is to report a large-scale, supercomputer-based ab initio calculation that includes both nucleon correlations and A(1232) isobar excitations. Our objective is to provide a realistic microscopic framework within which to consistently assess the importance of the aforementioned effects. We find that A(1232) isobar effects are small except at very large momentum transfer, and that a comprehensive conventional manybody structure calculation is sufficient to obtain the correct magnitude and qualitative features for both (7,p) and (7, n) reactions over a wide range of energies and angles.The calculation is a generalization of the microscopic continuum shell model treatment originally developed by Buck and Hill [16]. The many-body Hamiltonian for 16 0 is diagonalized rigorously in a model space spanned by products of continuum single-particle states and the mass A = 15 bound states. We use a realistic two-body, finiterange nucleon-nucleon interaction with spin, isospin, and tensor components, and we rigorously include all nonlocalities arising from antisymmetrization. The central N-N interaction between nucleons i and j is V c [a 0 -f a