More than 50 people were injured in the incident, which occurred early on Wednesday morning
The Israeli military said the bodies of three hostages seized in the October 7 attack had been recovered from the Palestinian territory, where fighting raged on Friday.
The announcement of the discovery came ahead of a ruling by the UN's top court, the International Court of Justice, in a case accusing Israel of "genocide".
On the ground, witnesses and AFP reported overnight air and naval strikes in Gaza City, and the civil defence and an Al Ahli hospital doctor said at least five people were killed when a family home in the city's Al Daraj neighbourhood was hit.
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In and around Jabalia in the north of the Gaza Strip, where urban combat has reignited months after Israeli operations began, the army said it retrieved the bodies of three hostages during a night-time operation.
The three — Israeli hostage Chanan Yablonka, Brazilian-Israeli Michel Nisenbaum and French-Mexican Orion Hernandez Radoux — were "murdered" during the October 7 attack and their bodies had been taken into Gaza, the military said.
It follows the recovery last week of four bodies of hostages found in tunnels under Jabalia, including of Hernandez Radoux's girlfriend Shani Louk.
The military reported raids in Jabalia and operations in central Gaza, and said "troops eliminated dozens of terrorists" in the north.
A Palestinian security source told AFP there were clashes between Israeli forces and militants in the town of Jabalia and its refugee camp, with another source at Kamal Adwan hospital saying it was "out of service, and has 14 medical staff trapped inside".
Along with Al Awda, Kamal Adwan is one the last two functioning hospitals in northern Gaza, both of which are besieged, according to the World Health Organization.
Other facilities across Gaza are suffering severe shortages of medical supplies and fuel to power generators, according to UN and Palestinian officials.
Israel in early May launched an assault on Rafah, the last Gazan city to be entered by its ground troops, defying global opposition and sending more than 800,000 people fleeing, according to UN figures.
Troops took over the Palestinian side of the Rafah border crossing with Egypt, further slowing the sporadic arrival of trucks carrying badly needed aid for Gaza's 2.4 million people.
Military spokesman Rear Admiral Daniel Hagari said "we will not stop fighting" for the freedom of hostages "being held by Hamas in living hell".
Netanyahu, facing rising domestic pressure to secure the release of captives still held by Palestinian militants, would "soon" address the US Congress, House Speaker Mike Johnson announced on Thursday.
The United States, a steadfast ally of Israel during the war, has seen President Joe Biden increasingly push Netanyahu to reduce the violence, threatening to halt arms supplies amid a rising civilian death toll.
An AFP photographer saw a group of Israeli activists rallying outside the US consulate in Jerusalem, carrying banners that call to "Free Gaza" and "Stop arming genocide", before being removed by security forces.
Anti-occupation groups Free Jerusalem and All That's Left said seven activists were detained including five US citizens.
In the latest flare-up on Western campuses over the war, British police arrested 16 people at a protest at Oxford University.
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