Attempts were made to intercept the drone after it impacted the Red Sea coast vacation town of Eilat, according to the Israel Defense Forces (IDF).
Twenty persons, including two men with severe limb injuries, were sent to Yoseftal Hospital, according to the Magen David Adom emergency medical service.
After the bombing, the Houthis, who are supported by Iran, claimed responsibility for the strike.
Two drones struck two “Israeli enemy targets” in a “successful” operation, according to Yahya Sarea, a group spokesman.
Live footage of the drone strike and the surrounding region was shown by Israeli TV channels, revealing billowing smoke rising from the scene.
Social media footage that has been confirmed by the shows a drone flying overhead and then vanishing from view as it passes behind buildings.