The strike in Gaza followed a nightly Qassam bombardment of a military base in Zikim that left dozens of soldiers injured, some of them seriously.
Islamic Jihad, which claimed responsibility for the attack, said, "We launched a message, not only a rocket" and boasted of its "great achievement for the people and the resistance."
The group's operatives celebrated the "successful attack" in their mosques in Gaza, using loud speakers to announce the number of casualties.
A senior commander of the Jihad's military wing, Abu Ahmed, stated that the attack came as a response to Israel's threats to launch an offensive in Gaza.
"These threats are not new and attest to a leadership crisis in Israel. This is an attempt by the government and the army to distract t public opinion from the problems they are faced with.
"Tonight we proved again that these threats do not deter us. The resistance will not stop, and if there is an invasion, it will not be a walk in the park for the Israelis," he concluded.
Another senior Jihad official said that the Zikim military base was a priority target for the group. "We know that there is a large number of soldiers in this base. We already hit it in the past, knowing that this is one of Israel's most important bases in the area.
"We knew that at this hour we would hit many soldiers – and the assumption proved correct."
Hanan Greenberg and Shmulik Hadad contributed to the report