The home of Hamas leader Ismail Haniyeh has been hit by an Israeli missile, according to the Gaza Interior Ministry.
An Israeli aircraft fired a missile at the house early on Tuesday causing damage but no casualties, the ministry said.
An Israeli military spokeswoman had no information on the report but was checking for details.
Mr Haniyeh's son confirmed the strike on his Facebook page and added that the house of the former Hamas Gaza prime minister was empty.
Hamas said that its TV station Al-Aqsa TV was also targeted but the station continued to broadcast.
As night fell over Gaza, army flares illuminated the sky and the sound of intense shelling could be heard.
The military warned thousands of Palestinians to flee their homes in areas around Gaza City - usually the prelude to major army strikes. A number of rockets fired from Gaza were launched toward various regions in southern and central Israel, including the Tel Aviv area.
At least one of the rockets was intercepted by the Iron Dome system.
Earlier, Israel accused Hamas of misfiring two rockets - one of which struck Gaza's main hospital and the other a refugee camp, killing nine children.
A Palestinian official said at least 10 people in total were killed in the strike on the camp, and a further 46 injured.
However, the Israel Defence Forces (IDF) denied responsibility for the attacks and said it had not been operating in the area.
Lieutenant Colonel Peter Lerner, an Israeli army spokesman, rubbished the claims as "ridiculous" and told Sky News: "The Israeli Defence Forces did not carry out any strikes in that area. Shifa Hospital was not a target, nor was the Shati Beach camp.
"Both of those locations were struck by terrorist rockets that were launched towards Israel and fell short."
The IDF also tweeted: "Since the beginning of the operation #IDF has documented approximately 200 rockets & mortars that landed short within #Gaza."
Sky's David Bowden, who visited the hospital in Gaza City, said: "I've seen injured children, some very badly injured and not so badly injured, and in the morgue I have seen dead children.
"There were screaming children, some walking wounded, but they were all dazed, wondering what was going on, and were surrounded by screaming relatives.
"The blame game has started. Clearly, the people there believe it was the Israelis. But the Israelis were quick off the mark to say it was nothing to do with them.
"Whatever happened, there are children dead and injured, and those pictures are winging their way around the world, and the pressure from the international community on both sides to stop this, and stop it now, will become immeasurable."
Israeli media, meanwhile, reported nine soldiers had been killed - four in mortar strikes on Eshkol in southern Israel, and another five in combat in Gaza.
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