Gaza’s Hamas-run health ministry says an Israeli air strike killed at least 70 people in the Al-Maghazi refugee camp in the centre of the strip.
A spokesman said the death toll was likely to rise given the large number of families living in the area.
The Israeli military told the BBC it was looking into reports of the strike.
It comes as Israeli and Arab media say Egypt, which borders the Gaza Strip, has put forward a new proposal for a ceasefire between Israel and Hamas.
Dozens of injured people were rushed from Maghazi to nearby Al-Aqsa Hospital with footage showing some children’s faces covered in blood and body bags piled outside.
The health ministry says three houses were hit in the attack late on Sunday.
According to ministry spokesman Ashraf al-Qudra, a densely populated residential block was destroyed.
AP People in Al-Aqsa Hospital after the reported air strikeA father said he had lost his daughter and grandchildren, adding that his family had fled from the north for safety in central Gaza.
“They lived on the third floor of one of the buildings,” he said. “The wall collapsed on them. My grandchildren, my daughter, her husband – all gone.
“We are all targeted. Civilians are targeted. There is no safe place. They told us to leave Gaza City – now we came to central Gaza to die.”
The Palestine Red Crescent Society says “intense” Israeli air strikes have led to the closure of main roads between Maghazi and two other refugee camps, Al-Bureij and Al-Nuseirat, “hindering the work of ambulances and rescue teams”.
In a statement to the BBC, the Israeli military said it had received “reports of an incident in the Maghazi camp”.
“Despite the challenges posed by Hamas terrorists operating within civilian areas in Gaza, the IDF [Israeli Defense Forces] is committed to international law including taking feasible steps to minimize harm to civilians,” it added.
