Israel has launched a bombing campaign on Rafah in the territory's south after directing more than one million Palestinians to travel to the area.
On Monday, one of its airstrikes ignited a massive blaze at a tent camp in the Tel Al-Sultan neighbourhood, where thousands were sheltering after Israeli forces began their offensive in east Rafah more than two weeks ago.
At least 45 people were killed.
Foreign Affairs Minister Penny Wong has condemned Israel's actions.
"Israel's strikes have had horrific and unacceptable consequences," she said in a social media post on Tuesday.
"Events of the last 24 hours underscore that we must see a humanitarian ceasefire now so that civilians can be protected.
"Australia has been very clear that Israel must not proceed with its operation in Rafah."
She also reiterated calls for designated terrorist group Hamas to "stop using Palestinian civilians as human shields and lay down its arms".
Video of the attack on Tel Al-Sultan obtained by Reuters, showed a fire raging in the darkness and people screaming in panic.
More than half of those dead were women, children and elderly people, and the death toll is likely to rise among those with severe burns, health officials in Gaza said.
Statement following Israel's strikes on Rafah. — Senator Penny Wong (@SenatorWong) pic.twitter.com/3TaJCkmLtSMay 27, 2024
Fellow cabinet minister Pat Conroy also labelled the deaths in Rafah as "incredibly distressing".
"We're now at a point where more than half of Gaza's people are sheltering in Rafah," he told ABC News Breakfast.
"These latest reports of casualties are deeply distressing, so I can understand people being extremely upset about that."
On October 7, Hamas attacked Israel, killing 1200 people and taking more than 200 hostages, according to Tel Aviv.
In response, Israel launched air strikes and a ground invasion of Gaza that, according to the local health ministry, has killed more than 36,000 Palestinians, injured more than 80,000 and displaced more than 1.7 million.
Israel's military has claimed the strike in the Rafah neighbourhood was based on "precise intelligence" and had killed Hamas' chief of staff for the West Bank and another official behind attacks on Israelis.
The International Court of Justice on Friday ordered Israel to stop its attacks, but Tel Aviv has pressed on, claiming the ruling grants some scope for military action.
with Reuters
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