But you wouldn't know that by looking at the city's manicured beaches, which were filled Monday with sunbathers, swimmers and paddleball players, who said they were determined to defy the guerrillas' intimidation and to support Israel's offensive in Lebanon.
Niv Kaufman, 32, said he has a contingency plan in case Hezbollah attacks his city with Katyusha rockets.
"If there's Katyushas, we'll go to the pub," he said as he sat on a towel on a sunny beach lined with tall hotels overlooking the Mediterranean Sea.
"I'll just make sure it's underground," he said with a smile.
Other beachgoers acknowledged they were worried about the risks Tel Aviv now faces, but said they fully supported Israel's offensive in Lebanon as the only way to end the security threat posed by the guerrillas.
"People are really sick and tired of Hezbollah. ... They just want to put an end to it, once and for all," said Itamar Zamir, 24, as he drank a beer on the beach.
The offensive began Wednesday after Hezbollah captured two Israeli soldiers in a cross-border raid. Since then, 24 Israelis have been killed, half of them civilians killed in hundreds of missile attacks that hit as far as 25 miles south of the Israel-Lebanon border.
Israeli officials said Hezbollah has obtained long-range missiles that could theoretically reach Tel Aviv, which is 80 miles from Lebanon. On Monday, the military said an Israeli airstrike in Lebanon had destroyed just such a missile. So the city's 380,000 residents, and the 2.5 million people who live in the greater metropolitan area, have been ordered to remain close to sheltered areas.
Col. Yechiel Kuperstein, an official with the army's "Homefront Command," told The Associated Press that cities such as Tel Aviv face a far less serious risk of a missile attack than northern cities such as Haifa, which has been struck repeatedly in recent days. But the situation could "change every day, every hour," he said.
He said Tel Aviv residents have been told to immediately seek shelter if they hear air raid sirens warning of an incoming missile. Many homes and office buildings in Israel are built with bomb shelters.
Despite the warnings, there were few signs of concern in bustling, laid back Tel Aviv on Monday.
Malls, restaurants, coffee shops and office buildings were busy, as they often are on a normal business day. Pedestrians filled sidewalks, and bike riders competed with cars and taxis on crowded streets.
As always, the beaches were full of people playing Matkot, or beach paddleball -- the unofficial national sport of Israel -- during which people in bathing suits stand at the water's edge and use wooden rackets to swat squash balls back and forth.
Beachgoer Mona Cohin said she is worried about a possible missile attack in Tel Aviv but that she and her friends fully support Israel's offensive.
Israelis "want this to continue, to finish Hezbollah," she said. "They want to finish them, so it won't happen again."
Others acknowledged that Tel Aviv might be showing less bravado if it had faced missile attacks as deadly as those that hit Haifa. On Sunday, eight civilians died in the northern city in Hezbollah's deadliest ever missile attack on Israel. As rockets continued to explode in Haifa on Monday, the city's beaches, streets, cafes and stores were nearly empty or closed. Most residents spent the day in bomb shelters.
"I didn't think before that Haifa was in danger, but then they hit it," Ram Katzav, 32, said of Hezbollah, as he built a sand castle with his 4-year-old son on Tel Aviv's beaches. "We have to stop the rockets."