Israeli strike on Gaza camp 'burns civilians alive' as Netanyahu admits 'tragic mistake'

But it also said it was investigating reports that a strike it carried out against commanders of the Islamist militant group in the city of Rafah, just over Gaza's border with Egypt, had caused the fire.

Netanyahu said the strike had not been intended to cause civilian casualties, in a speech in Israel's parliament which was interrupted by shouting from opposition lawmakers.

The PM continued: "In Rafah, we already evacuated about 1 million non-combatant residents, and despite our utmost effort not to harm non-combatants, something unfortunately went tragically wrong."

The late night airstrike followed the interception of eight rockets fired towards Israel from the Rafah area in the south of Gaza.

The Palestinian Ministry of Foreign Affairs, based in the West Bank, called the strike and resulting fire a "heinous massacre", while Egypt condemned Israel's "deliberate bombing of the tents of displaced people", state media reported, describing it as a blatant violation of international law.

And while the US urged Israel to take more care to protect civilians, it stopped short of calling for a halt to the Rafah incursion - Israel's assault on the city as part of its ongoing military response to the October 7 Hamas attacks.

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A US National Security Council spokesperson said: "Israel has a right to go after Hamas, and we understand this strike killed two senior Hamas terrorists who are responsible for attacks against Israeli civilians - but as we've been clear, Israel must take every precaution possible to protect civilians."

Labour leader Sir Keir Starmer, who has faced calls from the left of his party to adopt a tougher line on Israel, said: "It's horrifying to see that... I've been saying for some time the Rafah offensive should not take place.

"I was shocked by what I saw overnight, I think any human being would be shocked by what they saw. It's got to stop."

While French President Emmanuel Macron said he was "outraged" over Israel's latest attacks, adding: "These operations must stop. There are no safe areas in Rafah for Palestinian civilians."

Survivors said families were preparing to sleep when the strike hit a neighbourhood where thousands had been sheltering in the aftermath of the start of Israel's ground offensive two weeks prior.

Umm Mohamed Al-Attar, a Palestinian mother, told Reuters: "We were praying, and we were getting our children's beds ready to sleep... There was nothing unusual, then we heard a very loud noise, and fire erupted around us.

"All the children started screaming... The sound was terrifying; we felt like the metal was about to collapse on us, and shrapnel fell into the rooms."

More than half of the dead were women, children, and elderly people, officials from Gaza's Hamas-run health ministry said, adding that the death toll was likely to rise from people with severe burns.