Alter index shrink space vs alter index rebuild?

 Hi all,

My segment advisors recommend that i shrink space for an index. When I analyze my index using my own script (check for percentage of deleted rows and the height), it shows that i should perform a rebuild for the index.

Now, I am confuse between the below:

(1) alter index XXX shrink space

(2) alter index XXX rebuild.

What is the differences between the 2 and which should i peform first?

Help needed urgently! Thanks in advance.