Israel will strike those who attack its citizens, and all those who support them, Prime Minister Benjamin Netanyahu said following a rocket attack on the southern town of Eilat onThursday, adding that the Sinai has long become a base for terror attacks against Israelis.

The premier's comments came after a grad rocket exploded near a residential area in the southern Israeli city of Eilat near the border with Egypt; no injuries or damage were reported, but some Eilat residents were said to be suffering from shock.

Security forces found traces of the rocket near a building site in the Shahamon neighborhood early Thursday morning, about 150 meters from a residential area, after strong explosions shook the city approximately twenty minutes after midnight on Wednesday.

Security forces continued to search for traces of more rockets, thought to have been fired toward the city from the Sinai Peninsula.

Ron Gertner, police commander for the Eilat district, said that, according to estimates, "the rocket was fired from the Sinai area," adding that “investigations will continue in the morning, and only after their completion will we be able to reach any final conclusions.”

Later Thursday morning, Netanyahu, speaking at an event marking 40 years to the operation against the hijackers of Sabena Flight 571, said that the Sinai has long became a launching ground for terror attacks against Israeli citizens.

"We're building a fence. The fence won't stop rockets, but we'll find a solution for the rockets too," Netanyahu said, adding that Israel will "attack those who attack us and their backers, in this case as well."

In another response to the attack on Eilat, Defense Minister Ehud Barak said Thursday called the strike "a serious incident."

"We're studying the incdieent and we will target those who shoot at Eilat and attempt to hurt Israeli citizens. There will be no compromise in the matter. The security situation in the Sinai forces us into a different kind of confrontation," Barak added.

Speaking after the attack on Eilat, defense officials indicated Thursday that there were no clear warnings of the intention to strike the southern town.

The missile strike came after a deadly terror attack near Eilat in August of last year, in which eight Israelis and six Egyptian soldiers were killed.