The rocket hit a car park in downtown Ashkelon, damaging cars and nearby buildings. One woman was slightly injured and at least three people were reported to be in a state of shock and required medical assistance.
Ashkelon, which has a population of 122,000 and is located some 12 km (7 miles) from the border with Gaza, is out of the range of standard rockets and mortars fired by Palestinian militants. Grad rockets, smuggled into the coastal enclave from Egypt, have a longer range, however.
Palestinian militants intensified rocket attacks on Israel last week, launching over 30 at southern Israeli towns. Israel, in response, resumed targeted airstrikes on Gaza militants and their infrastructure.
Though Israeli Prime Minister Ehud Olmert vowed a "harsh" and "disproportionate" response to Palestinian rocket attacks, Defense Minister Ehud Barak said Israel had no plans for a large-scale military operation in the enclave.
Israel's Operation Cast Lead, which ended in mid-January, killed some 1,300 Palestinians in Gaza and injured over 5,300 others. Up to 50,000 people were also left homeless in the enclave of 1.5 million. Israel's casualties in the three-week conflict were 13, including 10 military personnel.