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An Israeli strike Saturday on a displacement camp in the south of the Palestinian territory has killed at least 71 people, Gaza's health ministry said.

It is the latest reported massacre in the Al-Mawasi area, where many Palestinians were told to flee to, and came as international mediators pushed on with efforts to halt the war between Israel and Hamas militants.

There has been widespread global outrage over the war's civilian toll.

A statement from the Gaza health ministry said there were more than 71 dead and 289 people wounded in what it called a "brutal massacre by the occupation", a reference to Israel, at Al-Mawasi camp.

A correspondent for °®Âþµº's Arabic-language sister service, Al Araby Al Jadeed, reported that medical sources are expecting the death toll to rise.

Israeli strikes also targeted rescue teams as they attempted to help victims, with some of the rescuers killed, the correspondent added.

Israel's military said it was "looking into" the incident.

"What did we do?" a woman screamed in the street, in images captured by AFPTV. "What did we do? We were just sitting near the beach."

Sirens wailed and smoke rose in the distance as men used blankets to collect victims. Some were clearly beyond help and lay dead on the road.

The Israeli army said it targeted two senior Hamas officials in the strike on Al-Mawasi, which sources told Israeli media outlets included Qassam Brigades chief Mohammed al-Deif.

A military statement said that "based on precise intelligence" the army and air force "carried out a strike in an area where two senior Hamas terrorists and additional terrorists hid among civilians".

Hamas dismissed the claim as an excuse to cover up the massacre of civilians.

" The occupation's claims about targeting leaders are false. This is not the first time the [Israeli] occupation has claimed to target Palestinian leaders, only to later be proven false. These false claims are intended to cover up the scale of the horrific massacre"

Israel in May had told Palestinians in the Rafah area to move to a designated humanitarian area in Al-Mawasi on the coast as troops moved in to the southern city of Rafah near the Egyptian border.

Later that month a fire killed 45 people at a tent city in the area. Israel's military claimed it had targeted and killed two senior Hamas militants in northwest Rafah in the strike which sparked the blaze, but added its munitions alone could not have caused the fire.

In another incident around the same time, a Gaza civil defence official said an Israeli strike killed 21 people at a displacement camp west of Rafah. Israel's army rejected the allegations, saying it "did not strike" the designated humanitarian area in Al-Mawasi.

In late June, the International Committee of the Red Cross said 22 people were killed by shelling that damaged its Gaza office, which is surrounded by hundreds of displaced people who sought shelter there.

Israel's latest war on Gaza has killed at least 38,443 people, also mostly civilians, according to a toll from the Gaza health ministry issued Saturday afternoon.

The war has left the vast majority of Gazans displaced and short of life-saving assistance in a territory where much of the infrastructure has been destroyed.