The Israeli military said the strike on Sunday evening in the southern Rafah region targeted and killed two senior Hamas militants – but it also sparked a firestorm that Palestinians and several Arab countries condemned as a “genocide”.
A US National Security Council spokesman said Israel should “take every precaution possible to protect civilians”.
The Israeli military said it was launching an investigation.
“There is no safe place in Gaza. This horror must stop,” UN Secretary-General Antonio Guterres posted on social media. Diplomats said the UN Security Council would convene an emergency session on Tuesday to discuss the attack.
Displaced Gaza resident Khalil al-Bahtini was preparing to leave the affected area. “Last night the tent opposite ours was targeted,” he told AFP on Monday.
“We have loaded all our stuff, but we don’t know where to go.”
Israeli Prime Minister Benjamin Netanyahu said the government was investigating the “tragic accident”, which he told parliament occurred “despite our best efforts” to protect civilians.
Relatives of those held hostage in Gaza have increased pressure on Netanyahu's government to seek a deal for the hostages' release. They protested from the public gallery as he spoke and waved posters of their loved ones.
Israel attacked Rafah late Sunday, just hours after Hamas launched a volley of rockets into the Tel Aviv area, most of which were destroyed.