A military spokesman told Xinhua that two fighter jets were sent from a southern air base, after a ground control station identified the drone.
The drone was shot down over the Yatir forest in the Negev region.
Military spokesman Capt Roni Kaplan said they could not tell from where the drone originated and what its objective was.
The military said the drone was initially spotted entering Israeli airspace from the Mediterranean Sea and heading south.
A report in the Jerusalem Post said the UAV flew over West Bank settlements and military bases before it was downed.
Troops were checking the area where the drone was shot down in a bid to locate debris that could shed light on its origin and objective, Kaplan said.
Media outlets speculated that the drone was sent to collect intelligence or crash into an Israeli town or military installation.
The Ha'aretz daily said the incident was the fourth of its kind in the past decade.
Small drones had previously crossed into Israel from its northern border with Lebanon, and were presumably operated by the Hezbollah, the report said.
The military did not rule out the possibility that militant groups in the Gaza Strip could be behind the incident.
Jerusalem: The Israel Air Force intercepted and shot down a drone that had penetrated the country's airspace, the military said.
First Published: Sunday, October 07, 2012, 09:12