Palestinians killed, including three children, in Israeli strikes: report
The explosion hit a residential area near the Hamadeen Mosque, east of Beit Hanoun, in the northern Gaza Strip.
The Palestinian health ministry and witnesses said Israeli bombing was responsible for the deaths, a claim that was quickly denied by Israel.
The Israeli army said the explosion was a result of a Hamas rocket launch to Jerusalem "that went wrong", in a statement carried by Israel's Channel 12.
Later, Israel said it carried out airstrikes in Gaza on Monday killing "three Hamas operatives", according to Haaretz.
It was not clear where the strikes took place.
Earlier on Monday, Hamas fired rockets towards Jerusalem in response to ongoing Israeli violence against Palestinians at Al-Aqsa Mosque compound and in Sheikh Jarrah - a Jerusalem neighbourhood where Palestinian families are due to be evicted from their homes to make way for Israeli settlers.
The rockets towards Israel were quickly intercepted, causing no injuries.
Abu Obeida, spokesman for Hamas' military wing, said the rocket attack was a response to what he called Israeli "crimes and aggression" in Jerusalem.
"This is a message the enemy has to understand well," he said.
Over a decade of siege
In 2006, Israel imposed a land, sea, and air blockade on the strip, effectively turning the coastal enclave into an open-air prison, where basic necessities such as food, fuel and medicines are severely restricted.
Critics say the blockade, along with a periodic bombardment of Gaza, amounts to collective punishment of the coastal enclave's 2 million residents.
In 2014, the UN - along with four other human rights organisations - said that the Gaza Strip could end up becoming 'uninhabitable' because of Israeli policies. The decade-long siege has plunged hundreds of thousands of Palestinians into poverty.
Nearly 70 percent of Gaza's population is food insecure and around 80 percent of Palestinians in the beseiged enclave are reliant on international aid, according to the United Nations.
Out of Gaza's 1.8 million population, 1.4 million are refugees whose ancestors were forced out of their homes in what is now Israel during the 1948 Arab-Israeli war.