An Israeli missile has flattened a two-story house in a residential neighbourhood of Gaza City, killing at least 11 civilians, medical officials said.
The attack came as Israel expanded the targets of its offensive to target homes of wanted militants.
The attack, the single deadliest incident of the five-day-old Israeli operation, is likely to raise international pressure for a halt to the offensive.
The airstrike targeted the home of the Daloo family in Gaza City's Nasser neighbourhood, reducing it to rubble.
Five women, including one 80-year-old, and four small children were among the dead, said Gaza health official Ashraf al-Kidra.
Frantic rescuers pulled the children's bodies from the ruins of the house, including a toddler and a five-year-old, as survivors and bystanders screamed in grief. Later, the bodies of the children were laid out in the morgue of Gaza City's Shifa Hospital.
The Israeli military said the target of the attack was a top rocket mastermind of the Islamic Jihad militant group. The claim could not be verified, and al-Kidra said the two men killed in the attack were also civilians.
The blast also damaged nearby buildings, and injured women and children were evacuated by ambulances.
The deaths brought to 66 the number of Palestinians killed in the Israeli offensive, including 32 civilians, said al-Kidra. Three Israeli civilians have also been killed in the fighting.
The attack came as an Israeli envoy flew to Cairo to hold talks with Egyptian officials on a ceasefire. Egypt has been leading international efforts to broker a truce.