The strike occurred as both Hamas and Israel acknowledged receiving a new truce proposal from mediators aimed at halting hostilities in Gaza during the holiday.
"There are eight martyrs, including five children, following a pre-dawn Israeli air strike on a house and a tent sheltering displaced people in Khan Yunis," Mahmud Bassal, spokesman for the civil defence agency, told AFP.
A fragile truce that had provided weeks of relative calm in the Gaza Strip collapsed on March 18 when Israel resumed its aerial bombardment and ground offensive in the Palestinian territory.
Sunday's air strike came as mediators - Egypt, Qatar, and the United States - continued efforts to broker a ceasefire and secure the release of Israeli hostages still held in Gaza.
A senior Hamas official stated on Saturday that the group had approved a new ceasefire proposal put forward by mediators and urged Israel to support it.
Israeli Prime Minister Benjamin Netanyahu's office confirmed receipt of the proposal and stated that Israel had submitted a counterproposal in response.
However, the details of the latest mediation efforts remain undisclosed.
The ongoing war in Gaza was triggered by Hamas's October 7, 2023, attack on Israel, which resulted in the deaths of 1,218 people, according to an AFP tally based on official Israeli figures.
During the attack, militants also abducted 251 individuals, 58 of whom remain in captivity -including 34 whom the Israeli military says are deceased.
Since the Hamas attack, Israel's military campaign against the Palestinian group has killed at least 50,277 people in Gaza, the majority of them civilians, according to the Hamas-run territory's health ministry.
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