People and security personnel rushed to the scene of the strike and tried to put out the fire that engulfed the car, the Associated Press reported. Hamas said another man was killed in the strike.
Today's bombing in Tel Aviv is reminiscent of six years ago and could mark a serious escalation in the conflict.
A truce in Gaza suits all sides but none of the groups seem interested in a long-lasting solution.
A complex system of air defences has been instrumental in protecting Israel's population from incoming rockets.