The Iron Dome defense system intercepted and shot down a Grad rocket aimed at the Israeli southern city of Eilat early on Tuesday.
According to a military official, the rocket was fired from nearby border with Egypt's Sinai Peninsula as part of a salvo of rockets fired toward Eilat, a resort city packed with tourists.
"We heard a siren and immediately afterward we saw the interception in the sky. The explosion looked like flares being fired, and we immediately understood it was an Iron Dome interception," a city resident said.
"It's not the first time that a rocket has been fired at Eilat, but it is the first time the Iron Dome has intercepted one," Dani Arditi, former national security adviser told the Army Radio.
The Iron Dome, also known as “Iron Cap” is a mobile all-weather air defense system developed by Rafael Advanced Defense Systems. It is a missile system designed to intercept and destroy short-range rockets and artillery shells fired from distances of 4 to 70 kilometres away and whose trajectory would take them to a populated area.
A Salafi Palestinian terror organization claimed responsibility for the attack. The group claimed the rocket attack was in retaliation for a weekend drone strike, attributed to Israel by foreign media, which killed four Palestinian terrorists as they were readying to launch a rocket into Israel.
The Salafi group -- The Mojahideen Shura Council Environs of Jerusalem -- which operates in Sinai and the Gaza Strip, issued a statement on social media networks and in the Egyptian press saying that "we bombed Umm al-Rashrash (the Arabic name for Eilat) with a Grad rocket was a rapid response to the crime committed by Jews recently, in which four jihadi fighters were killed by drone in Sinai."
The organization went on to issue threats, saying "the Mojahideen have infused fear and awe into the hearts of the criminal Jews who were forced to scurry into bomb shelters in the middle of the night. Some of them got scared and announced that three rockets had been fired, and some of them were intercepted."
"We want to emphasize that Eilat and other Jewish cities will never enjoy security, tourism or a flourishing economy. The Jews will pay for the jihadi fighters who died in Sinai. Sinai will stand strong against Israeli aggression," the statement said.
Al Qaeda accused Israel of carrying out Friday's missile strike in Sinai but Israel dismissed the accusation. Egypt's armed forces said one of its helicopters fired the missile at al Qaeda terrorists.
Israel shut for two hours Eilat’s airport last Thursday citing security threats from the Sinai.
The Sinai was largely demilitarized as part of the Israeli-Egyptian peace treaty of 1979. But Israel has allowed Egypt to send troops to the area to combat the Islamist terror groups and arms smuggling by Palestinians into Gaza.