A rocket attack in Israel was declared part of the "jihad against Jews" after a terrorist group linked to ISIS claimed responsibility.

Silafi jihadists in Gaza released an online statement saying the strike was in response to the arrest of five Salafi operatives by Hamas.

'Red alert' sirens sounded in the southern Israeli town of Sderot which borders on Gaza shortly before the rocket hit, The Jerusalem Post reported.

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The rocket struck the street in the southern Israeli town of Sderot causing large plumes of smoke and left a scorched crater in the road

The rocket left a scorched crater in the road while the blast shattered windows of homes and shrapnel damaged cars in the street nearby.

The Gaza-based cell is called Ahfad al-Sahaba-Aknaf Bayt al-Maqdis and one of several Salafi jihadist groups who claim to share an ideology and purpose with ISIS.

In a statement, released in Arabic and Hebrew and seen by the Times of Israel they said, 'Oh you cowardly Jews: You don’t have safety in our land.'

Gaza Strip is controlled by Hamas and since 2014 has observed a de facto ceasefire with Israel but local armed Salafi groups sometimes attempt their own strikes.

In response to the latest attack the Israel Defence Forces fired shells at a Hamas observation point in the town of Beit Hanoun, in the north of Gaza. Hamas-run media said there were no injuries caused by this retaliation strike.

'I can never get used to this': Locals said the strike caused hysteria even though it's not the first time they've been targeted

In Sderot local student Dar Cohen, 24, told i24news how he was woken by his roommates screaming.

'Around 10:20 the siren went off," he said. "Then all of a sudden the other students in the apartment started screaming that a rocket was being launched to the city.'

Panicking, he ran towards the bomb shelter but only made it as far as the stairs before the explosion hit.

'The noise is so loud it can shatter windows and it can knock you – like a sonic boom In your chest. I can not describe it but it's terrifying,' he said.

'There was a lot of hysteria, as not a lot of us are well adjusted to this, it's happened to me about seven times. I can never get used to it.'

Israeli police reported no casualties in Sderot and bomb-disposal teams were called to the area which was cordoned off to the public.

The last rocket attack to come from Gaza was on August 21. Israeli authorities reported no casualties.

The blast shattered windows of homes and shrapnel damaged cars in the street nearby but police reported no injuries