The Hamas-run Health Ministry in Gaza says 50 people were killed and dozens injured in an explosion at a refugee camp near Rafah.
The Israeli Defense Forces (IDF) has confirmed that it has carried out an airstrike on a Hamas compound in the area. It says the incident is under investigation.
Earlier in the day, Hamas fired eight rockets from Rafah towards Tel Aviv, the first long-range attacks on the city since January.
Videos from the southern Gaza Strip show a large explosion and intense fires.
Hamas said an Israeli airstrike hit a camp for displaced Palestinians northwest of Rafah, far away from recent military operations in a designated humanitarian safe zone.
It says women and children are among the dead.
The IDF confirmed it had targeted Hamas militants in the area and said it was aware of reports that the attack had ignited a fire that harmed civilians.
The country was investigating the incident but said it had used precision weapons against legitimate targets.
Earlier on Sunday, air raid sirens sounded around Tel Aviv as central Israel came under attack by Hamas rockets fired from near Rafah.
The eight missiles were intercepted by air defense systems or fell into fields.
The Israeli military offensive in Rafah continues despite the International Court of Justice’s ruling on Friday that it must stop.
The rocket barrage highlights the threat Hamas still poses to people across Israel, although there were no reports of injuries.
It also illustrates the challenges the Israeli military faces as it pushes further into southern Gaza to drive Hamas out of what it calls its “last great stronghold.”
The rocket attack came ahead of further ceasefire negotiations between Israel and Hamas, which are expected to resume next week.
Hamas’ military wing said it had acted in response to “the massacre of civilians.”
Israel launched a long-awaited offensive in Rafah about three weeks ago, vowing to destroy the remaining Hamas battalions there.
It said it believes Israeli hostages are also being held in the city.
According to the UN, more than 800,000 Palestinians have fled Rafah since the offensive began.
About 1.5 million people took shelter there from the fighting elsewhere in Gaza.
Israel’s military campaign in Gaza began after Hamas-led gunmen attacked Israel on October 7, killing around 1,200 people and taking 252 others back to Gaza as hostages.
Nearly 36,000 Palestinians have been killed in the war since then, according to the Hamas-run Health Ministry in Gaza.
