The Color Red rocket alert siren blared throughout the city of Eilat shortly after 9 a.m. on Wednesday morning, sending residents racing for bomb shelters.
Tourists and others throughout the Red Sea resort area reported hearing multiple loud blasts a few seconds later.
It is believed that terrorists fired three rockets at the city, although the geographic source of the rocket fire is not yet clear. IDF commanders suspect the attack was launched from Sinai.
Security personnel searched the area but so far have not found rockets. No casualties were reported.
On previous occasions some rockets have hit the sea, or have hit Jordan.
The city's airport has been shut down due to concerns that there may be additional attacks.
In early April, an Iron Dome anti-missile battery installation was set up near Eilat due to the growing terrorist threat and lawlessness seen developing in the Sinai Peninsula.