Israel said Monday it was looking into the "grave and awful" impact on Palestinian civilians of a Gaza strike the previous night that the army said had targeted Hamas operatives.

"We're looking into this," said government spokesman Avi Hyman after officials in Hamas-ruled Gaza had reported 45 dead in a displacement camp where the strike caused a fire.

"It was definitely grave," Hyman said. "Any loss of life, civilian live, is grave and is awful. We seek to go after Hamas and limit civilian casualties... This is an unfolding story."

The strike was aimed at two Hamas militants responsible for "many attacks" targeting Israelis in the occupied West Bank, he said.

"The were drenched in Israeli blood, these two individuals," Hyman said.

"According to initial reports, a fire broke out after the attack. These terrorists were hiding underground, and it would appear that there were civilian casualties."

The military said that the strike, which came hours after a rocket attack from Rafah had targeted Tel Aviv, had killed Yassin Rabia and Khaled Nagar, both senior officials for Hamas in the West Bank.

Devastation after Israeli strike on Rafah camp  

Men cleared away the charred debris of shelters and children salvaged food in Gaza's southern city of Rafah on Monday after the Israeli strike torched the camp for displaced Palestinians.

"People were not just injured or killed, but charred," 24-year-old Mohammed Hamad told AFP in the aftermath of the strike that killed at least 45 people.

"My cousin's daughter, a child no more than 13, was among the martyrs. She had no features at all because shrapnel tore off her face." 

Footage released by the Palestinian Red Crescent Society showed chaotic nighttime scenes of ambulances racing to the attack site and evacuating the wounded, including children.

As Palestinians cleared the site on Monday, only blackened metal sheeting and charred planks remained, the tent shelters having been all but obliterated.

"When these rockets fall on a tower block there are dozens of martyrs, so what about when they are tents?" lamented a man called Hamad.

"When we heard the sound (of the explosion), the sky suddenly lit up," displaced Palestinian Muhannad, an eyewitness, told AFP. 

"We saw charred bodies and dismembered limbs as a result of the use of (...) missiles that caused a massive fire," the director of Gaza's civil defence agency, Mohammad al-Mughayyir, said.

- 'Ground shook violently' -

Mughayyir, who oversaw the response to the fire, said on Monday "rescue and retrieval operations concluded last night, while efforts to extinguish the fire continued for 45 minutes".

He said battling the inferno was made even more difficult because of fuel and water shortages.

"We also saw cases of amputations, injured children, women, and elderly among the dead," he added.

Displaced Palestinians who had sought shelter in the area after being told by the Israelis to evacuate their homes were shocked when the camp was targeted.

"They dropped leaflets asking us to go to the humanitarian zone in Tal al-Sultan, so we complied and came here," Abu Muhammad, who was displaced from north Gaza five months ago, told AFP.

"But yesterday when I was having dinner at sunset, suddenly it felt like there was an earthquake -- the ground shook violently," he said.

Mohammed Abu Qamar, 27, said he was equally baffled by the strikes, after he too moved from north Gaza to the camp that had been labelled a "safe zone" by the Israeli authorities.

"Yesterday evening, to our surprise, the camp was bombarded with rockets in this supposedly safe place," he told AFP on Monday. 

"A fire broke out, and children, women, and old people were burned."

At the Tel Al-Sultan Clinic, body bags of white sheeting lay on the floor of a room before the dead were taken away for burial in pickup trucks.

"She was seven months pregnant ... her room was bombed," a man who did not disclose his name said at the clinic of a woman who had been killed in the incident.

"She was preparing to welcome her new baby. What did this innocent child do to deserve this?" he asked.