In response to the attack, the Israeli military claims to have declared a state of "war preparation" and called up reservists.
Air raid sirens sounded all around the nation earlier as dozens of rockets were fired at Israel.
The attack has been attributed to the Palestinian militant group Hamas, whose armed branch claimed credit and said it fired 5,000 missiles in 20 minutes.
The group "had initiated a huge firing of rockets into Israeli territory from the Gaza Strip," according to Israel's Defense Forces (IDF), and militants had invaded Israeli territory "in several spots."
Hamas will "face the consequences and accountability for these occurrences," according to the statement, which also stated that the commander of the general staff was conducting a "situational evaluation."
It continued by saying that although civilians in the southern and central regions are "forced to stay next to shelters," those living in the area around the Gaza Strip have been instructed to stay inside.
The Magen David Adom rescue organization in Israel reported one fatality and 15 injuries.
Israeli firefighters are seen fighting fires in the city of Ashkelon in video from the Reuters news agency as dense plumes of smoke rise from burned-out automobiles.
In response to the missile attacks, security chiefs are scheduled to meet, according to the office of Israeli Prime Minister Benjamin Netanyahu.
Israel has also carried out airstrikes on Gaza-based targets.
In Israel, one person has died, and there have reportedly been explosions close to Tel Aviv and in the vicinity of Gaza.
BBC