One person inside the vehicle, believed to be a member of the Islamic resistance movement, Hamas, was wounded in the attack. Witnesses told Aljazeera that they saw two persons escape from the vehicle.
It was the second missile strike in Gaza in less than a week.
The first missile landed about 70 metres from the vehicle in Gaza City's Shaikh Radwan neighbourhood.
The second missile directly hit the car. Bystanders were wounded by flying glass and shrapnel.
"I saw a flame hit a small car and people trying to escape from the car," said Rauf Musalam, a business owner who witnessed the attack, reported an Israeli newspaper.
"Apaches (helicopters) were overhead as people rushed to help the wounded".
Hamas has not confirmed that the occupants of the car were members of the movement. The Israeli army had no immediate comment on the attack.
Last Thursday, an Israeli helicopter missile attack in Gaza City killed the commander of the armed wing of Islamic Jihad, a top deputy and three civilians.
Minutes after that attack, the first such air strike in two months of relative calm, a resistance attack killed four Israelis at a bus stop outside Tel Aviv.
Israel has killed dozens of resistance fighters and some politicians in what it calls "targeted killings" in Palestinian areas.
Earlier on Tuesday, Israeli occupation soldiers killed one Palestinian in the southern Gaza Strip while at the same time, invading several West Bank towns and cities, imposing curfews and destroying homes.
Twenty-two year old Falal al-Najar suffered fatal injuries after he was shot in the chest in the Khan Younis area of the southern Gaza Strip close to the border with Egypt.
Cities that were invaded included Nablus and Ram Allah.