An Israeli airstrike killed at least 35 people in a tent camp in the Gaza city of Rafah, medics said, drawing condemnation from European leaders on Monday who urged implementation of a World Court ruling to halt Israel's offensive.

In scenes grimly familiar from a war in its eighth month, Palestinian families rushed to hospitals to prepare their dead for burial after the strike late on Sunday night set tents and rickety shelters ablaze.

Women wept and men held prayers beside bodies in shrouds.

"The whole world is witnessing Rafah getting burnt up by Israel and no one is doing anything to stop it," Bassam, a Rafah resident, said via a chat app, of the strike in an area of western Rafah that had been designated a safe zone.

Despite a global outcry at the toll on civilians, Israeli tanks continued to bombard eastern and central areas of the city on Monday, killing eight, local health officials said.

Israel's military said Sunday's air attack, based on "precise intelligence", had eliminated militant group Hamas' chief of staff for the second and larger Palestinian territory, the West Bank, plus another official behind attacks on Israelis.

Earlier on Sunday, it had said eight rockets were intercepted after being fired from the Rafah area. A minister said that showed the need for continued operations against Hamas.

Israel's top military prosecutor, however, called the air strike "very grave" and said an investigation was underway.

"The IDF (Israel Defence Forces) regrets any harm to non-combatants during the war," Major-General Yifat Tomer Yerushalmi said at a conference on Monday.

The attack took place in the Tel Al-Sultan neighbourhood, where thousands were sheltering after Israeli forces began a ground offensive in the east of Rafah over two weeks ago.

Many of the dead were women and children, the health officials said, adding that the death toll was likely to rise as some were in critical condition with severe burns.

Israel has kept up attacks on Rafah despite a ruling by the top U.N. court on Friday ordering it to stop, arguing that the court's ruling grants it some scope for military action there.

Germany's foreign minister Annalena Baerbock and the EU foreign policy chief Josep Borrell said the ruling must be respected. "International humanitarian law applies for all, also for Israel's conduct of the war," Baerbock said.

NO SAFE ZONE

By daylight, the camp was a smoking wreckage of tents, twisted metal and charred belongings.

Sitting beside bodies of his relatives, Abed Mohammed Al-Attar said Israel lied when it told residents they would be safe in Rafah's western areas. His brother, sister-in-law and several other relatives were killed in the blaze.

"The army is a liar. There is no security in Gaza. There is no security, not for a child, an elderly man, or a woman. Here he (my brother) is with his wife, they were martyred," he said.

"What have they done to deserve this? Their children have been orphaned."

Hospitals in Rafah, including the International Committee of the Red Cross field hospital, were unable to handle all the wounded, so some were moved to hospitals in Khan Younis further north in Gaza for treatment, medics said.

The U.N. agency for Palestinian refugees said the situation was horrifying. "Gaza is hell on earth. Images from last night are yet another testament to that," UNRWA wrote on X.

Nearly 36,000 Palestinians have been killed in Israel's offensive, Gaza's health ministry says. Israel launched the operation after Hamas-led militants attacked southern Israeli communities on Oct. 7, killing around 1,200 people and seizing more than 250 hostages, according to Israeli tallies.

Israel says it wants to root out Hamas fighters holed up in Rafah and rescue hostages it says are being held in the area.

But it faces an international outcry.

"On top of the hunger, on top of the starvation, the refusal to allow aid in sufficient volumes, what we witnessed last night is barbaric," Ireland's Foreign Minister Micheal Martin said.

Egypt condemned the Israeli military's "deliberate bombing of the tents of displaced people", state media reported, describing it as a blatant violation of international law.

Saudi Arabia also condemned the Israeli attack and Qatar said the Rafah strike could hinder efforts to mediate a ceasefire and hostage exchange.

Israeli tanks have probed around the edges of Rafah, near the crossing point from Gaza into Egypt, since May 6 and have entered some of its eastern districts.