At least 29 Palestinians, including children, have been killed in an Israeli air strike on a multi-storey residential building in the east of Gaza City, a local hospital says.
The Hamas-run Civil Defence agency said warplanes targeted the area near al-Hawashi mosque in the Shejaiya neighbourhood on Tuesday morning.
It initially reported that 23 people were killed but warned its first responders were searching for two dozen others under the rubble. In the evening, it announced 15 bodies had been recovered, without giving an updated death toll.
The Israeli military said it had struck a "senior Hamas terrorist" who was responsible for planning and executing attacks in the area.
Numerous steps were taken to mitigate harm to civilians, including the use of "precision weapons", it added.
The military also accused Hamas of violating international law by deliberately using the civilian population as human shields.
Video from Shejaiya showed the dust-covered bodies of small children being carried away from the rubble by distraught relatives and rescue workers.
Ayub Salim, 26, told the AFP news agency the area around the residential building struck on Tuesday morning was "overcrowded with tents, displaced people and homes".
He said it was hit by "multiple missiles" and that "shrapnel flew in all directions".
"Dust and massive destruction filled the entire place, we couldn't see anything, just the screams and panic of the people," he added. "It is truly a horrific massacre."
Hamas also said the Israeli military had "committed a bloody massacre".
Thousands of Shejaiya residents fled last week after the Israeli military ordered the evacuation of much of the neighbourhood, saying it was operating with force to destroy "terrorist infrastructure".
But residents said the area struck on Wednesday was not covered by the evacuation order, so many families had remained there.
"We were told this was a safe area for the displaced, yet they are targeting residential blocks with lethal missiles. What have the children done? Do they fire rockets at the Israeli army?" an elderly man in Shejaiya told BBC Arabic's Gaza Lifeline programme.
Earlier on Tuesday, Gaza's Hamas-run health ministry said at least 33 people had been killed in Israeli attacks over the previous 24 hours.
That brought the reported total of those killed since Israel resumed its air and ground campaign against Hamas on 18 March to 1,482.
The Israeli military meanwhile said its aircraft had struck more than 45 "terror targets" across Gaza over the past day, including weapons manufacturing sites and rocket launchers.
It also said ground forces were advancing into Shejaiya as well as the so-called "Morag Corridor" in southern Gaza.
The military corridor is being established by seizing territory between the city of Rafah, whose residents have been ordered to evacuate, and neighbouring Khan Younis.
During a visit to the area on Wednesday, Israeli Defence Minister Israel Katz said: "We are now slicing through the strip, and we are increasing the pressure step by step, so that they [Hamas] will give us our hostages."
"All of Rafah will be evacuated and turned into a security area. This is what we are doing now," he added, according to the Ynet news website.
The BBC has asked the Israeli military for comment.
Another 390,000 people have been displaced over the past three weeks, with two-thirds of the territory now designated by the Israeli military as "no-go" zones or placed under evacuation orders, according to the UN.
