A civil defence official in Hamas-run Gaza said an Israeli strike on a displacement camp west of Rafah on Tuesday killed at least 21 people, after a similar strike that sparked global outrage.
Israel denied carrying out the latest reported strike, which occurred hours ahead of a UN Security Council meeting to discuss a Sunday strike which Palestinian officials said killed 45 people.
Despite mounting concerns over the civilian toll of its war on Hamas, Israel has shown no signs of changing course and international efforts aimed at securing a ceasefire remain stalled.
In the latest bloodshed, Gaza's civil defence agency official Mohammad al-Mughayyir said 21 people were killed in an "occupation strike targeting the tents of displaced people" in west Rafah. Hamas said an Israeli strike on the area caused "dozens of martyrs and wounded".
Israel's army rejected the allegations, saying it "did not strike" the designated humanitarian area in Al-Mawasi.
In Rafah, residents and a Palestinian security source said Israeli tanks had now penetrated the heart of the southern city.
"People are currently inside their homes because anyone who moves is being shot at by Israeli drones," one resident, Abdel Khatib, said.
- 'Random bombing' -
An emergency United Nations Security Council meeting is due to discuss Sunday's deadly strike at 1915 GMT.
Ahead of the meeting, Israel's military said the weapons used in that strike "could not" have caused the deadly blaze in the camp.
"Our munition alone could not have ignited a fire of this size," said military spokesperson Rear Admiral Daniel Hagari.
Sunday evening's strike, which medics said also wounded hundreds of civilians, drew worldwide condemnation.
The sight of the charred carnage, blackened corpses and children being rushed to hospitals led UN chief Antonio Guterres to declare that "there is no safe place in Gaza. This horror must stop."
Israel's Prime Minister Benjamin Netanyahu referred to the strike as a "tragic accident" but affirmed the continuation of the campaign to destroy Hamas over the October 7 attack and to bring home all the hostages.
Palestinian militant group Islamic Jihad on Tuesday released a video showing an Israeli hostage alive and held in Gaza, identified by Israeli media as Sasha Trupanov, 28.
Air strikes and shelling battered Gaza overnight Monday-Tuesday -- including the Tal al-Sultan area where the displacement camp went up in flames near a facility of the UN agency for Palestinian refugees, UNRWA.
Faten Jouda, a 30-year-old resident, described the situation as very dangerous.
"We didn't sleep all night. There was random bombing from all directions, including artillery shelling and air bombardment as well as firing from aircraft.
"We saw everyone fleeing again," she told AFP. "We too will go now and head to Al-Mawasi because we fear for our lives," she said of the nearby coastal area Israel has declared a safe "humanitarian zone".
- Palestinian statehood -
UNRWA said one million civilians had fled Rafah since Israel launched its assault on the city in early May despite a chorus of international warnings.
Nearly eight months into the deadliest Gaza war, Israel has faced ever louder opposition, as well as cases before two Netherlands-based international courts.
In a landmark move on Tuesday, Ireland, Norway and Spain formally recognised the State of Palestine, a step so far taken by more than 140 UN members but few Western governments.
Spanish Prime Minister Pedro Sanchez said the recognition was "not only a matter of historic justice... it is also an essential requirement if we are all to achieve peace".
"It is the only way to move towards the solution that we all recognise as the only possible way to achieve a peaceful future: that of a Palestinian state living side by side with the State of Israel in peace and security."
Irish Prime Minister Simon Harris said the aim was to keep Middle East peace hopes alive, and urged Israel to "stop the humanitarian catastrophe" in Gaza.
Israel has slammed the recognition as a "reward" for the Islamist Hamas movement, and recalled its diplomatic envoys from Madrid, Dublin and Oslo.
Foreign Minister Israel Katz went further and attacked Sanchez on X, telling him that "you are a partner to incitement to genocide of the Jewish people".
Spanish Foreign Minister Jose Manuel Albares said the three governments would "issue a coordinated response" to Israel which would be "calm but firm".
- 'Hell on Earth' -
The Gaza war was sparked by Hamas's October 7 attack on southern Israel, which resulted in the deaths of more than 1,189 people, mostly civilians, according to an AFP tally based on the latest Israeli official figures.
Militants also took 252 hostages, 121 of whom remain in Gaza, including 37 the army says are dead.
Israel's retaliatory offensive has killed at least 36,096 people in Gaza, mostly civilians, according to the territory's health ministry.
Sunday night's attack that killed dozens in the displaced persons camp was targeting two senior Hamas members, the Israeli military said.
It said aircraft "struck a Hamas compound" and killed Yassin Rabia and Khaled Nagar, senior officials for the group in the occupied West Bank.
The strike came hours after Hamas fired a barrage of rockets towards Tel Aviv, with most being intercepted.
The civilian death toll in the Gaza camp prompted a wave of condemnation, with Palestinians and many Arab countries calling it a "massacre".
UNRWA chief Philippe Lazzarini said Monday that "the images from last night are testament to how Rafah has turned into hell on Earth".
On the diplomatic front, Egypt has "intensified efforts to relaunch" negotiations for a "truce and a detainee exchange deal", the state-linked Al-Qahera News reported.