An Israeli air strike yesterday killed about 500 Palestinians at a Gaza hospital crammed with patients and displaced people.

The strike was the bloodiest single incident since Israel launched an unrelenting bombing campaign against the Palestinians in Gaza on October 7.

Sources at the Gaza Ministry of Health told Reuters that around 500 Palestinians were killed in the air strike on Al-Ahli al-Arabi hospital.

The victims included patients, women, and children.

"Hundreds of victims are still under the rubble," a statement from the health ministry said, calling it a war crime.

The strike comes on the eve of US President Joe Biden's visit to the Middle East amid fears that escalating war may spiral into a wider conflict.

Arab countries, Iran and Turkey swiftly condemned the attack. The Palestinian prime minister called it "a horrific crime, genocide" and said countries backing Israel also bore responsibility.

Video obtained by Reuters showed several ambulances arriving at another Gaza hospital carrying people injured at Al-Ahli al-Arabi hospital. One man was bleeding heavily from the head. A boy was being carried on a stretcher.

The Israeli military said it did not have any details about the reported bombing, but was checking.

In Washington, the Pentagon said it was aware of the reports about the hospital being hit but had no details. The Pentagon, which has sent five C-17 aircraft with military assistance to Israel so far, reiterated that there were no preconditions on the aid being provided and added: "We expect all democracies like Israel to uphold the law of war."

Separately, the United Nations agency supporting Palestinian refugees said six people were killed when one of its schools sheltering displaced families was hit at the Al-Maghazi refugee camp during Israeli air strikes.

People gather around bodies of Palestinians killed in Israeli air strike on the Ahli Arab Hospital in central Gaza after they were transported to Al-Shifa Hospital yesterday. Photo: AFP

UNRWA commissioner-general Philippe Lazzarini called the bombing at the camp, also in central Gaza, "outrageous" and warned the death toll would likely rise.

"It again shows a flagrant disregard for the lives of civilians. No place is safe in Gaza anymore, not even UNRWA facilities," he added.

"At least 4,000 people have taken refuge in this UNRWA school turned shelter. They had and still have nowhere else to go," it added.

Around 3,000 people, about one-third of them children, have been killed in Israeli air strikes across the Gaza Strip since the war erupted on October 7.

Israeli bombardment has displaced around half of the 2.4 million Palestinians in Gaza from their homes. It has imposed a total blockade on the enclave, halting food, fuel and medical supplies, which are rapidly running out.

Residents fleeing the north have crammed into southern areas such as Khan Younis but have found no respite from bombing there.

"They brought them from the north just to strike them in the south," said a Palestinian who came to the south from north, weeping.

According to an Al Jazeera report, at least Palestinian 80 Palestinians died in overnight Israeli air raids in southern Gaza.

Some 1,200 people, among them about 500 minors, are believed to be trapped under the rubble in Gaza, according to Gaza health authorities.

"So many times medics say they hear victims scream, but they cannot do anything about it," said Mohammed Abu Selmia, general director of Shifa Hospital, Gaza's biggest medical centre, told AP.