The dead included nine children, an official told Reuters.
There was no comment from the Israeli military on the attack although it had reported fighting and air strikes against Hamas militants in the Khan Younis area on Thursday.
Gaza residents also said Israeli planes and tanks bombarded three refugee camps in the centre of the shattered enclave, prompting many civilians to head south.
Five Palestinians were killed in an Israeli air strike on a car in Al-Nusseirat refugee camp, health officials told Reuters.
Israel's war against Hamas is nearing the three-month mark amid international concern that the conflict is spreading beyond Gaza, drawing in the Israeli-occupied West Bank, Hezbollah forces on the Lebanon-Israel border, and Red Sea shipping lanes.
Fears were heightened after a drone strike on Tuesday killed Hamas deputy leader Saleh al-Arouri in the Lebanese capital Beirut. He was buried in the Palestinian camp of Shatila in the city on Thursday, amid throngs of mourners launching volleys of gunfire.
Hezbollah leader Hassan Nasrallah vowed that his powerful Iran-backed Shi'ite militia «cannot be silent» following the killing. Nasrallah said his forces would fight to the finish if Israel chose to extend the war to Lebanon, but he made no concrete threats to act against Israel in support of Hamas.
Israeli military spokesperson Rear Admiral Daniel Hagari declined to comment when asked what Israel was doing to prepare for a potential Hezbollah response, saying only: «We are focused on the fight against Hamas.»
Israeli Defence Minister Yoav Gallant, meeting U.S. envoy Amos Hochstein, said there must be a «new reality» in the Lebanon-Israel border