Israel's military says Iranian forces have fired rockets at its positions in the occupied Golan Heights.
It said some 20 rockets were fired by Revolutionary Guards. It said "no hits were located" on Israeli territory.
It is one of the biggest attacks against Israel from Syria in decades.
On Tuesday Israel took the unusual step of ordering authorities in the Golan to prepare civilian bomb shelters after identifying "irregular activity" by Iranian forces in Syria.
Israel has been anticipating a retaliatory attack by Iran since Israel killed seven Revolutionary Guards when it struck Iranian targets in Syria in April. That strike came immediately after Israel brought down what it said was an armed Iranian drone launched from Syria on a mission to attack Israel.
The heightened tension comes in the wake of the announcement by President Donald Trump that the US would pull out of the international deal with Iran.
What happened in the Golan?
The Israel Defense Forces (IDF) says it has targeted dozens of Iranian facilities with air strikes in retaliation for the attack, which has not been confirmed by Iran.
It said weapons stores, missile launchers and intelligence facilities were all targeted in the wave of strikes overnight.
Syria's state news agency Sana said Israeli missiles had been shot down south of Homs, but reported that a weapons depot and a radar installation had been hit.
Why is there a war in Syria?
The Golan Heights explained
The latest confrontation follows a reported Israeli missile strike on a military outpost south of the Syrian capital of Damascus on Tuesday.
Sana reported that two missiles were shot down in the Kiswah area and that two civilians were killed in an explosion.
But the Syrian Observatory for Human Rights, a UK-based monitoring group, said the missiles hit an Iranian weapons depot, killing 15 pro-government fighters.
Earlier this week, Syrian state TV broadcast footage it said showed the downing of Israeli missiles near Damascus
Eight members of Iran's powerful Revolutionary Guards force and several other non-Syrian nationals were among those killed, it said.
Israel has occupied most of the Syrian Golan Heights in the 1967 Middle East war and later annexed it in a move not recognised internationally.
Why does Israel hit Iranian interests?
Iran is Israel's arch-foe and has repeatedly called for an end to the existence of the Jewish state.
It is a major ally of Syria and has deployed hundreds of troops to the country. It says they are there as military advisers to Syria.
Thousands of militiamen armed, trained and financed by Iran - mostly from Lebanon's Hezbollah movement, but also Iraq, Afghanistan and Yemen - have also been fighting alongside the Syrian army.
Iran has increasingly strengthened its military presence in Syria, something which Israel considers a direct threat.
Israel has vowed to prevent Iran from entrenching itself there and has targeted, or is believed to have targeted, Iranian assets and positions, increasingly in recent months.
Prime Minister Benjamin Netanyahu has said Israel may go to war with Iran "sooner rather than later" to stop it attacking Israel.
Mr Netanyahu has been instrumental in urging Mr Trump to end his support for the nuclear agreement with Iran.
Last week, he unveiled what he said was a cache of Iranian documents proving it had not ended its efforts to build a nuclear weapon, in defiance of the deal.
Mr Netanyahu was in Moscow this week, informing Russian President Vladimir Putin, whose country is an ally of Iran and Syria, about the findings.
