At least 13 people have been killed in a blast outside Gaza City's biggest hospital, the Hamas-run health ministry in Gaza says.
BBC Verify has verified graphic videos showing badly injured and possibly dead people lying outside the hospital.
The Israeli military has confirmed it struck an ambulance that it says was being used by Hamas operatives.
It did not say where the air strike took place.
"An IDF aircraft struck an ambulance that was identified by forces as being used by a Hamas terrorist cell in close proximity to their position in the battle zone," it said in a statement.
It said a number of Hamas fighters had been killed and accused Hamas of transferring militants and weapons in ambulances, but has not yet supplied evidence of this.
"We emphasise that this area is a battle zone. Civilians in the area are repeatedly called upon to evacuate southwards for their own safety," it added.
BBC Verify studied three videos - one of which is very graphic - and established that they were filmed outside Al-Shifa and were uploaded on Friday afternoon.
In one video, people were filmed lying in pools of blood in the road next to vehicles - some were severely injured and some were not moving.
There is no crater visible in the footage we've seen so far, and no debris or shrapnel visible. There's damage to the front of an ambulance and some cars on the road have smashed windows.
A Hamas government statement said Israeli forces targeted "a convoy of ambulances which was transporting the wounded" from Al-Shifa hospital Gaza City towards Rafah in the south.
Egypt's health ministry said just 17 wounded Palestinians were evacuated for treatment in Egyptian hospitals on Friday instead of the 28 originally planned because of the "events" at Al-Shifa.
The head of the World Health Organization said he was "utterly shocked" by the explosion at Al-Shifa.
"We reiterate: patients, health workers, facilities and ambulances must be protected at all times. Always," Tedros Adhanom Ghebreyesus posted on X.
Bisan Owda, a Palestinian filmmaker, was nearby when the attack happened.
"Some people lost their legs, lost their hands, people were trying to carry injuries," she told the BBC. "People were crying, trying to find each other."
In addition to the patients at Al-Shifa, thousands more people are sheltering from Israeli air strikes there.
Ms Owda said many were unable to find space inside the hospital and were sleeping in nearby streets,.
The Israeli military says there is a major Hamas headquarters situated underneath the hospital.
Israel began bombing Gaza after Hamas killed more than 1,400 people in Israel and kidnapped more than 240 others.
It has also launched a ground operation and on Thursday said its forces had encircled Gaza City.
Israel has warned people to move to the south of the Gaza Strip and hundreds of thousands have left Gaza City and northern areas. But many thousands remain in northern Gaza.
Continued Israeli air strikes in the southern Gaza Strip, where Israel had told Gazans to go, as well as overcrowded conditions there have prompted some Palestinians to return to their homes in northern Gaza,
The Hamas-run health ministry in Gaza says more than 9,000 people have been killed in the Gaza Strip since 7 October.
More on Israel-Gaza war
Follow live: Latest updates
From Gaza: Stories of those killed in Gaza
History behind the story: The Israel-Palestinian conflict