The strike hit Al-Mawasi in the southern Gaza Strip, which Israel had designated as a “humanitarian zone” early in the war, and prompted condemnations from the region and beyond.
Samar al-Shair, one of tens of thousands of displaced Palestinians who have sought refuge in the coastal area, said the attack came “as we were sleeping in our tents”, setting makeshift shelters ablaze.
As Egyptian, Qatari and US mediation efforts again appear to stall, Israel’s Defence Minister Yoav Gallant said a truce and hostage release deal was a “strategic opportunity” that would give his country a “chance to change the security situation on all fronts”.
The Gaza health ministry said 20 bodies had been brought to hospitals since the early morning strike, but more victims were likely still buried in the sand.
The territory’s civil defence agency earlier gave a death toll of 40 people.
“There are entire families who disappeared under the sand,” an official said.
Israel’s offensive in Gaza has killed at least 41,020 people, according to the territory’s health ministry. The United Nations says most of the dead are women and children.
UN envoy Tor Wennesland condemned the strike, saying international humanitarian law “must be upheld at all times”, while stressing “civilians must never be used as human shields”.
Turkey said the strike added to Israel’s “list of war crimes”, while Egypt denounced “the continuation of Israeli massacres” and Saudi Arabia decried “a new attack in a repeated series of violations by the Israeli war machine”.
British Foreign Secretary David Lammy condemned “the shocking deaths”, which he said showed “how desperately needed” a Gaza ceasefire was.
The war has drawn in other Iran-aligned armed groups across the region, with Israeli forces trading regular fire with Hezbollah in Lebanon.
On Tuesday the military as well as a source close to Hezbollah said an Israeli strike on eastern Lebanon, far from the border, killed a commander from the Iran-backed group.
Hamas has demanded a complete Israeli withdrawal from Gaza as part of any truce deal, while Israeli Prime Minister Benjamin Netanyahu has insisted troops must remain along the territory’s border with Egypt.
The war has left large swathes of Gaza in ruins and displaced the vast majority of its 2.4mn people at least once.
“The entire population of the Gaza Strip is now concentrated on 10 percent of the territory,” said Philippe Lazzarini, head of the UN agency for Palestinian refugees UNRWA.