The 12-floor building was damaged in the strike on Saturday, and residents said dozens of families were made homeless, though no casualties were reported. Israel's military said the block was being used by Hamas to plan attacks on Israelis.
One of the 300 residents of the tower, which is located some 500 metres from the border with Egypt, told Reuters Israel gave them a 30-minute warning to flee the building at night.
Israel gave a 30 minute warning before it hit Al-MasryTower in the Rafah refugee camp. (EPA PHOTO)
"People were startled, running down the stairs, some fell, it was chaos. People left their belongings and money," said Mohammad Al-Nabrees, adding that among those who tripped down the stairs during the panicked evacuation was a friend's pregnant wife.
The strike raised alarm among residents of a wider Israeli assault on Rafah, where more than half of Gaza's 2.3 million people are sheltering. Israel has said it plans to carry out operations in the area, which it has called Hamas's last bastion.
But its pledge to do so only after civilians have evacuated has done little to quell international concern.
Five months into Israel's unrelenting air and ground assault on Gaza, health authorities say nearly 31,000 Palestinians have been killed and thousands more bodies are feared buried under rubble.
The war was triggered by an October 7 attack by Hamas on southern Israel, in which 1200 people were killed and 253 taken hostage, according to Israeli tallies.
A UN children's agency study warns one in six children in north Gaza are acutely malnourished. (AP PHOTO)
Hamas on Saturday named four Israeli hostages as having died in Israeli strikes in the enclave. Israel has previously said such videos by Hamas were psychological warfare.
The offensive has plunged Gaza, already reeling from a 17-year Israeli-Egyptian security blockade, into a humanitarian catastrophe.
In a speech marking Martyrs' and Veterans' Day in Egypt on Saturday, Egyptian President Abdel Fattah al-Sisi said the cost of rebuilding Gaza could exceed $US90 billion ($A135 billion).
Much of the coastal enclave has been reduced to rubble and most of its population is displaced, with the UN warning of disease and starvation.
A ship laden with relief supplies for Gaza was preparing to depart Cyprus on Saturday. The European Commission has said a maritime aid corridor between Cyprus and Gaza could start operating as early as this weekend.
Three Palestinian children died of dehydration and malnutrition at the northern Al Shifa Hospital overnight, said Gaza health ministry spokesman Ashraf Al-Qidra, raising to 23 the number of Palestinians who have died of similar causes in nearly 10 days.
Some 200 tonnes of rice and flour will be ferried directly to Gaza from Cyprus. (AP PHOTO)
"This brutal war has ruptured any sense of a shared humanity," said Mirjana Spoljaric, president of the International Committee of the Red Cross.
She called for an end of hostilities to allow for meaningful aid distribution in Gaza, for Hamas to release all hostages without conditions and for Israel to treat Palestinians in its custody humanely and to permit them to contact their families.
However, negotiations on a ceasefire and the release of 134 hostages still held incommunicado in Gaza seemed to stall ahead of the hoped-for deadline, the Muslim holy month of Ramadan, which begins on or around March 10.
A Hamas source told Reuters the group's delegation was "unlikely" to make another visit to Cairo over the weekend for talks. Hamas blamed the deadlock on Israel, which has refused to give guarantees to end the war or pull its forces out of Gaza.
Israel says the war will end only with the defeat of Hamas, whose ceasefire terms Prime Minister Benjamin Netanyahu has called "delusional".
The Israeli military said that over the past day it conducted arrests, located weapons and killed more than 30 militants in southern Khan Younis, central Gaza and in its north.
Gaza's health ministry said at least 82 people were killed in Israeli attacks in the last day.
Fears are mounting that during Ramadan violence could also spiral in the occupied West Bank, where Israel has stepped up raids amid Palestinian street attacks.
