The explosion, which did not trigger air raid alarms, occurred hours after the Israeli military confirmed it had killed a senior commander of the Iran-backed Hezbollah militia in southern Lebanon.
"An initial inquiry indicates that the explosion in Tel Aviv was caused by the falling of an aerial target, and no sirens were activated. The incident is under thorough review," the military said in a statement.
It was not clear how a relatively slow-moving drone evaded extensive Israeli air defenses. In April when Iran fired nearly 350 drones and missiles, 99% were intercepted and no real damage was reported.
Iran’s Tasnim website affiliated with the Revolutionary Guard published the news of the attack, quoting Houthi officials praising the operation, and saying the “one Zionist was killed and eight others injured.” Other Iranian government-controlled media relayed the news insisting that the Houthis were able to inflict “great damage” on Tel Aviv.
The attack on Tel Aviv is likely to fan fears about further fallout from the Gaza war, as the Houthis and other Iranian proxies side with the Palestinian militant group Hamas.
It said air patrols had been increased to protect Israeli airspace but said it had not ordered new civil defence measures, however the mayor of Tel Aviv said the city, Israel's economic centre, had been moved to a state of heightened alert.