"A barrage of rockets was fired at Ashdod, one of which hit a gas station causing massive damage," a statement from the army said.
Medics said three people had been taken to hospital, including one who was very seriously hurt.
"Three people were injured, one very seriously," emergency services spokesman Eli Bin told public radio of the incident, which occurred in the southern port city of Ashdod, 28 kilometers north of Gaza.
A large fire was raging at the site, with emergency teams trying to control the blaze, medics were quoted by AFP as saying.
Israel pressed forward Friday with a fourth day of its massive offensive on the Gaza Strip, with over 800 airstrikes that have killed at least 85 Palestinians.