The Islamic State group said Thursday that it fired rockets at the Israeli resort of Eilat from the Sinai Peninsula in a rare attack on the Jewish state from Egyptian territory.
The Israeli army said there were no casualties from Wednesday evening's rocket fire -- three of the rockets were intercepted by Israel's Iron Dome air defence system and a fourth fell short of the town.
A few hours later, two Palestinians were killed elsewhere in the Sinai. The Islamist Hamas movement which rules Gaza said it was an Israeli air strike. The Israeli army denied carrying out any such action.
"Thanks to God alone, a military platoon fired several Grad rockets yesterday" towards Eilat, the jihadists' Egyptian affiliate said in a statement circulated on social media.
It was the first time since 2015 that rockets had been fired at Israel from Egypt, said Ely Karmon, senior research scholar at the International Institute for Counter-Terrorism.
Egypt is one of just two Arab countries that have signed a peace treaty with the Jewish state.
IS has been waging a deadly insurgency against Egyptian security forces in the Sinai but it has rarely attempted attacks against Israel.
A few hours after the rocket attack, two Palestinians died elsewhere in the Sinai near the border with Gaza.
Hamas, the Islamist movement that runs territory, said the two men were hit by an Israeli air strike just inside Egypt.
Israeli army spokesman Peter Lerner denied any involvement in the strike. There was no comment from the Egyptian government.
The vast Sinai Peninsula borders both Israel and Gaza, although more than 200 kilometres (125 miles) separates Eilat from the site of the alleged Israeli strike.
Israel and Egypt have long accused Hamas of providing support to IS in Sinai.
"If indeed the attack on the tunnel was done by Israel then clearly Israel thinks that Hamas has some input in (the rocket attack)," Karmon said.
"Perhaps there is an evaluation that some of these jihadists came from, or weapons were received from, Hamas."
Israel provides intelligence support to Egyptian security forces fighting IS but tries to avoid any public involvement, he added.
The spokesman of Gaza's Hamas-run health ministry, Ashraf al-Qudra, named the two men killed as Hossam al-Sufi, 24, and Mohammed al-Aqra, 38.
Qudra said five others were wounded in what he called an Israeli strike.
A Hamas security source said the men were working in a tunnel used to smuggle goods between Gaza and Egypt when the Egyptian entrance was hit.
In the past, a labyrinth of smuggling tunnels linked the Sinai with Gaza.
But since the 2013 overthrow of Islamist president Mohammed Morsi, Egyptian authorities have moved to destroy them and have set up a wide no-go zone on the Gaza border.
Under the 1979 peace treaty between Egypt and Israel, there are restrictions on military deployments on the Sinai border monitored by international peacekeepers.
But since the jihadists launched their deadly insurgency in the wake of Morsi's ouster, Egypt has poured troops and police into the peninsula with the blessing of Israel and Western governments.
Hundreds of Egyptian security personnel have been killed, particularly in the north Sinai near the Gaza border.
There have been periodic attacks into Israel.
In 2011, assailants who came from the Sinai killed eight Israelis in a triple ambush north of Eilat. Pursuing Israeli forces killed seven attackers and five Egyptian police.
In 2013, four jihadists were killed by an Egyptian air strike as they were about to fire a rocket at Israel, according to the Egyptian military.
In 2014, two Israeli soldiers on patrol were wounded by unidentified men who fired an anti-tank weapon from the Sinai during an attempted drug-smuggling operation, according to the Israeli military.
And in 2015, rockets fired from the Sinai hit southern Israel without causing any casualties. IS claimed responsibility.