"Many are wandering around in shock by what they've seen after emerging to find their home rubble," said United Nations Relief and Works Agency (UNRWA) Commission General Peter Hansen in Gaza on Sunday.
Some 1650 Rafah residents have been made homeless in the wake of an Israeli troop rampage that lasted 72 hours this week. Fifty-five Palestinians, mainly civilians, were killed, medics told Aljazeera.
Rafah currently faces an "extremely serious humanitarian situation that is much worse than other [situations] that had been characterised as disasters," the UNRWA chief told Aljazeera.net.
Hansen, who toured Rafah to survey the damage, said that many other civilians are suffering from shock after Israeli troops bulldozed their homes while they were still inside.
Concurrent accounts of Palestinians who showed him in detail where they were while bulldozers leveled their homes proved that this was "not one made up story".
More than 800 civilians in Rafah have taken up temporary quarters in schools UNRWA converted into dormitories, said the senior UN official.
More than 20 people are sleeping
More than 20 people are staying in the school's run-down rooms, he said, stressing that the situation could not go on for long because of the "very unsatisfactory hygienic conditions".
Elderly women were seen picking through the debris of where their homes once stood as toddlers sat on the laps of their shaken parents surveying the rubble.
Hansen said he found a great deal of infrastructure, including streets, water pipes and electricity grids, destroyed.
Large parts of the camp were left for days without water and electricity, particularly in the Tal al-Sultan neighbourhood.
UNRWA has not yet budgeted how much financial aid will be needed for reconstructing Rafah, said Hansen.
But the Gaza Strip, and primarily Rafah, will need $32 million just for housing. Further finances are needed for direct cash assistance for residents "who have lost everything".
"We should not forget there has been similar destruction in other Gaza areas, including Khan Yunis and central camps" stressed Hansen.
One of the problems facing Rafah's residents is how they will manage to bring back some semblance of normality to their lives, he continued.
About $32 million is needed just
for housing in the Gaza Strip
"When you see your home in rubble and personal belongings gone, it's very difficult to imagine normalcy," he said, adding what is perceived as normal in Rafah -with "constant raids and shootings" - is not usual anywhere else.
Aid is trickling in, mainly from UNRWA.
Food, mattresses, water and a generator for the clinic have been finally allowed into the camp.
However, Israeli soldiers and blockades in Gaza have made it difficult for UNRWA workers to transport aid, said Hansen, adding troops had only allowed aid workers into the Tal al-Sultan neighbourhood - scene of some of the bloodiest fighting and demolitions - on Friday.
The International Committee for the Red Cross (ICRC) and the World Food Programme (WFP) have also mobilised efforts at the camp.
"No doubt a lot of psychological trauma has been created, among children and adults," he said. After touring the devastated camp, he realised that "all this damage wasn't done only to things but also minds and emotions".