Several families had taken shelter in the house when it was suddenly hit by a single projectile, says spokesperson Mahmud Bassal.
Among the dead are, according to Bassal, four children and three women. Several are injured and additional people are believed to remain in the ruins of the bombed-out three-story house, which is said to be located near a school in the Tuffah neighborhood.
Israel's military, the IDF, claims that the attack was directed at a military command center belonging to the terrorist-listed Hamas.
"The IDF is aware of reports that several civilians were killed as a result of the attack," the IDF writes in a statement to the AFP news agency.
In a separate Israeli air raid on a school, now serving as a refugee shelter in Gaza City, five people were killed on Saturday. According to the IDF, Hamas members were the target of the attack.
During the night against Saturday, at least ten more people were killed in Israeli attacks on other locations in the Gaza Strip, according to the civil defense in Gaza.