This type of disaster is only available when your city has a Missle Silo/Launch pad in the map. This disaster is also Very RARE to happen as the military that launches the rockets are programmed not to detonate on purpose. But once in an occasion a missle will be launched from the pad and may explode sending debris to fall down in the immediate area (similar to the Space Junk disaster). Depending on altitude the missle debris will NOT impact the ground but will despawn followed by the trail of smoke. If the missle detonated at low altitude the debris will reach the ground creating semi-craters (small) and catching buildings on fire. Buildings that were underneath the debris that impacted will be destroyed (+ a 3x3 radius around the radius). What makes this even more deadly is that roads are destroyed with the buildings its next to.
The missles are NPC guided so the player can not guide it to steer it someplace, and the missle event is rare so if your planning on having sections of city destroyed by a missle its best use the Buldozer Tool or the Autosarus/Giant Robot Maid disaster because this disaster is a rare occasion.