The Wafa news agency, quoting the Palestine Red Crescent Society (PRCS), said that many of those who died were “burned alive” inside their tents in the Tal as-Sultan area.
It put the death toll at 40, while the Reuters news agency quoted Ashraf al-Qudra, the spokesman for Gaza’s Ministry of Health, saying 35 people had been killed and dozens others injured.
Witnesses told local media that at least eight missiles had struck the camp on Sunday at about 8.45pm local time (17:45 GMT).
The Israeli attack followed Hamas’s first rocket attack on Tel Aviv in months.
Israel claimed the eight Hamas rockets were launched from the Rafah area, where its troops have continued a ground assault despite an order from the International Court of Justice (ICJ) to halt operations there.
The Israeli military claimed its air force struck a Hamas compound in Rafah and that the strike was carried out with “precise ammunition and on the basis of precise intelligence”.
The attack killed Hamas’s chief of staff for the West Bank and another senior official behind deadly attacks on Israelis, it said, adding that it was “aware” of reports that “several civilians in the area were harmed” and that the incident was “under review”.
The attack led to a massive fire, which Palestinian Civil Defence teams managed to extinguish after about 45 minutes.
The International Committee of the Red Cross reported its field hospital in Rafah was receiving an influx of casualties and that other hospitals also were taking in a large number of patients.
Doctors without Borders, known by its acronym MSF, said “dozens of wounded” as well as more than 15 of the dead had been brought to a facility that it supports.
“We are horrified by this deadly event, which shows once again that nowhere is safe,” the group wrote on the social media platform X, reiterating its call for an immediate ceasefire.
A spokesman for Palestinian President Mahmoud Abbas has condemned the Israeli attack as a “massacre that exceeds all boundaries”, according to the Wafa news agency.
Nabil Abu Rudeineh “stressed the urgent need for an intervention to stop the crimes committed against the Palestinian people immediately” and said the “heinous massacre” is a challenge to international orders, including “the lucid and candid ruling of the International Court of Justice (ICJ) ordering Israel to cease its military offensive against the city of Rafah and provide protection to the Palestinian people”.
Abu Rudeineh added he held the administration of US President Joe Biden responsible for Israeli crimes and demanded that Washington “compel Israel to stop the madness and genocide it is committing in Gaza”.