The house hit was located in the community of Mishmeret, around 20 kilometres (12 miles) north of Tel Aviv, police said.
The projectile, fired early in the morning on Monday, hit a house in the residential Sharon area, northeast of Tel Aviv, leaving seven people wounded, including two infants who suffered light injuries, the emergency services reported.
There was no immediate claim of responsibility to Monday's incident.
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According to Israeli intelligence sources, the only groups in Gaza that have rockets with this kind of range are Hamas and Islamic Jihad. The Hamas-run Gaza health ministry said two Palestinians, an 18-year-old and a 29-year-old, were killed by live fire, and 55 were wounded.
Palestinian activists have been flying burning kites and balloons into Israel as part of ongoing anti-occupation protests along the Gaza-Israel buffer zone.
Air-raid sirens sounded shortly before an explosion was heard in the area.
The IDF accused Hamas of carrying out Monday's pre-dawn rocket strike, and said troop reinforcements - including reservist soldiers - were being deployed to the Gaza border. The family dog was killed in the explosion.
Yahya Sinwar, the head of the Islamist militant group Hamas in the coastal enclave, canceled a planned public meeting scheduled for Monday afternoon, with Hamas officials citing "developments".
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Israeli Prime Minister Benjamin Netanyahu, who is cutting short a trip to the United States over the incident, has vowed to respond with force.
Benjamin Netanyahu said the attack would draw a strong response.
The latest attack follows disturbances involving Palestinian prisoners in southern Israel.
Palestinians wave Palestinian flags as they try to climb the security fence on the border between Israel and the Gaza Strip, east of Gaza City, on March 22, 2019. Trump tweeted that Israel should have full sovereignty over the long-disputed Golan Heights, which Israel seized from Syria during the 1967 Six-Day War.
No Israelis have been injured by the recent balloon attacks, though damage was caused to a home in the Eshkol region last month.
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The incident began when several Hamas prisoners stabbed two prison guards, moderately wounding one of them.