Footage from the scene showed frantic efforts to rescue children as smoke rose and explosions echoed nearby. The bodies of a man and a woman were seen on the ground, with desperate attempts at medical aid proving unsuccessful.
The civil defence, operating under the Hamas-run government, said several tents near the Jazeera social club were destroyed by fire.
At least 29 people were reported killed across Gaza on Monday amid ongoing hostilities, with diplomatic efforts to end the conflict continuing to falter.
