At least 37 people have been killed in a series of Israeli strikes, most in areas where displaced civilians have set up tents, Gaza’s Hamas-run civil defence agency says.

Witnesses in al-Mawasi told the BBC that tents were engulfed in flames following a “powerful” explosion, causing the deaths of dozens of Palestinians including children. One man said he woke to “screaming and panic” and watched as “the flames spread rapidly from one tent to another”.

Israel has previously told Palestinians to evacuate from other parts of Gaza to al-Mawasi.

The Israeli military did not immediately comment but said that it was looking into reports of the strikes.

UN children’s agency Unicef’s executive director Catherine Russell said: “Images of children burning while sheltering in makeshift tents should shake us all to our core.”

Later on Thursday Hamas formally rejected Israel’s latest ceasefire proposal, saying it was ready to negotiate a deal that would see the release of all the remaining hostages in return for an end to the war.

Israel had offered a 45 day ceasefire in return for the release of 10 hostages.

In a video statement, the head of Hamas’s negotiating team Khalil al-Hayya said the group would not “accept partial deals that serve [Israeli Prime Minister Benjamin] Netanyahu’s political agenda”.

Israel’s stated aim is the complete disarmament and destruction of Hamas.

In relation to the recent strikes, civil defence spokesman Mahmoud Bassal said two missiles had hit tents in the coastal al-Mawasi area near the southern city of Khan Younis, killing at least 16 people, “most of them women and children”. He said 23 others were wounded.

Video verified by the BBC showed the charred remnants of the camp with belongings strewn across the ground and survivors surveying the damage.

Survivors described waking to the “sound of screaming and panic” after a “powerful” explosion hit the encampment.

“I rushed outside and saw the tent next to mine engulfed in flames,” a man told the BBC’s Gaza Lifeline programme.

“Women were running out, trying desperately to escape the fire,” he continued.

“Many martyrs were lost in the fire and we were helpless to save them. It was heartbreaking to watch them die right in front of us, unable to do anything as the flames spread rapidly from one tent to another.”

He said that a “large number” of children had died.

A displaced woman from Khan Yunis said that the strike had killed 10 members of one family while they were sleeping, with another five family members injured.

A man described rushing to the scene with others after hearing the explosion and attempting to extinguish the flames by throwing sand on the tents.

“But we failed,” he said. “The fire was too intense, consuming the tents and the people inside. We were helpless, we couldn’t do anything to save them.”

Amande Bazerolle, an emergency coordinator for Medicines Sans Frontiers (MSF) in Gaza, said the strikes had occurred close to their office and MSF received some of the victims.

“Last night it was very close to our office in the south. When the tents were targeted and caught on fire we received the patients. Most of them are actually dead and arrive dead but we have some very critical patients,” she told the BBC.

Gaza’s civil defence agency said further air strikes killed seven people in the northern town of Beit Lahia, two near al-Mawasi and 10 people in Jabalia, including seven members of one family in one attack and three people at a school building being used as a shelter in another.

In a statement on Thursday, the Israeli military said that strikes over the past two days had “struck over 100 terror targets” including “terrorist cells, military structures and infrastructure sites”.

The IDF said that earlier in the week strikes in the area of Khan Younis had killed Yahya Fathi Abd al-Qader Abu Shaar, the head of Hamas’ weapons smuggling network. It said steps had been taken to mitigate the risk of harm to civilians.

Israel put Gaza under a complete blockade on 1 March and resumed the war on 18 March. Since then Israeli attacks have killed 1,691 people, the Hamas-run health ministry says. About half a million Palestinians have been displaced by renewed Israeli evacuation orders and Israel has incorporated 30% of Gaza into “security zones”.

On Thursday the heads of 12 major aid organisations said the humanitarian aid system in Gaza was “facing total collapse”.

“This is one of the worst humanitarian failures of our generation,” the chief executives of 12 NGOs, including Oxfam and Save the Children, wrote in a statement.

Israel says it aims to pressure Hamas to release hostages and has vowed to maintain the blockade. It claims there is no shortage of aid because 25,000 lorry loads of supplies entered during the ceasefire.

The war began on 7 October 2023 when Hamas carried out a cross-border attack on Israeli communities, killing around 1,200 people and seizing 251 hostages according to Israeli tallies.

Israel’s military campaign against Hamas has killed at least 51,065 people, according to the territory’s Hamas-run health ministry.