More than 40 rockets were fired into Israel in the biggest ever salvo of long-range fire from Gaza.
The Iron Dome rocket defense system intercepted a number of rockets and no significant injuries have been reported in the attack.
An Iron Dome battery intercepted a projectile over the greater Tel Aviv area for the second time on Tuesday evening.
Two loud thuds were heard by residents in downtown Jerusalem shortly after a rocket siren went off in the capital at approximately 10 p.m. Thousands of city residents promptly entered bomb shelters, while others remained outside and in area cafes.
According to police spokesman Micky Rosenfeld none of the rockets fired from Gaza landed directly in the city of Jerusalem, although two rockets likely landed just outside the city.
Air raid sirens were also activated in cities including Rishon Lezion, Bat Yam, Holon and Bnei Barak, but sirens were not sounded in Tel Aviv.
The Israel Air Force struck 50 targets in Gaza in past two hours as part of its ongoing Operation Protective Edge, bringing the total number of targets hit by Israel in Gaza to 200.
Earlier on Tuesday evening, the Iron Dome rocket defense system intercepted a projectile near Tel Aviv over the city of Rishon Lezion, as air raid sirens sounded in central Israeli cities for the first time amid recent escalations.
No injuries or damage were reported in the attack, which marked a widening of the range of rocket fire the Gaza Strip.
Israeli television showed a double-burst of smoke in skies above Tel Aviv after air raid sirens sounded, sending residents running for shelter.
Air raid sirens sounded in all of Gush Dan, including Tel Aviv, Petah Tikva, Lod and Givatayim.
It was the first Gaza rocket that reached Tel Aviv since Operation Pillar of Defense in 2012.
Following the attack over central Israel, the Home Front Command instructed the Tel Aviv Municipality to open public bomb shelters in the city.
The Home Front Command had earlier instructed Tel Aviv residents to prepare for utilizing protected rooms and shelters in their private homes.
Under the same instruction, the division responsible for civil security ordered for bomb shelters in Tel Aviv schools to be opened.
The IDF launched Operation Protective Edge in the early hours of Tuesday morning in order to quell the ongoing barrage of rocket fire from the Gaza Strip. Later in the day, the IDF begun actively calling up 40,000 reserves approved to it by the cabinet.
Palestinian rocket fire from Gaza continued to pound southern Israel throughout Tuesday, with some 80 rockets landing in Israeli territory by the evening. Iron Dome made 23 interceptions throughout the day, shooting down projectiles over Ashdod, Ashkelon, and Gaza border communities.
Meanwhile, the Israel Air force struck 150 targets in Gaza, and Palestinians reported multiple casualties in a number of the strikes.
Some 100 underground rocket launchers and ten attack tunnels were among the targets.
Daniel K. Eisenbud and Reuters contributed to this report.