Scenes of panic and carnage unfolded as Israeli helicopters fired missiles and occupation soldiers fired tank shells and machine guns at demonstrators in Rafah on Wednesday.
More than a dozen Palestinians have been confirmed killed, with witnesses and local medical staff telling Aljazeera up to 20 were feared dead.
At least 40 others - mainly civilians - were injured. The majority of those wounded were women and children, medical sources told Aljazeera's correspondent Samir Abu Shamala. Chaos swept the streets as survivors piled the wounded into vehicles.
Hospital floors were drenched with blood as doctors shouted for help and blood donations. Staff treated the wounded on the floor after quickly running out of beds.
More than 2000 Palestinians had been marching in protest against Israel's invasion of the neighbouring refugee camp.
The Israeli military has denied it deliberately targeted the protesters but said tank fire may have been responsible for the many Palestinian deaths.
The latest casualties raise to more than 40 Palestinians killed in Rafah refugee camp and the neighbouring city since Israel launched a massive assault on the camp early on Tuesday.
Earlier, Israeli occupation forces shot dead four Palestinian civilians, including two teenagers, in the Rafah refugee camp.
Israeli soldiers killed Muhammad Abu Nasr, 16, in the besieged Tal al-Sultan neighbourhood of the impoverished camp and a 13-year-old boy.
Palestinians say Israel is carrying
out war crimes
Khalil Abu Said, 37, was hit by an Israeli tank shell after coming out of his home carrying a white flag, said security sources.
Israeli troops had ordered all men to leave their homes and surrender their weapons. They also called on resistance fighters to surrender.
Occupation soldiers have also ordered by loudspeaker all males over 16 to gather in one place or risk demolition of family homes.
Israel has threatened to carry out a systematic destruction of homes in the impoverished area since the start of the invasion.
Some residents of the Rafah camp said men were emerging from homes but feared they would be harmed.
Israeli tanks and infantry have poured into Rafah in defiance of international criticism, drawing UN and European Union criticism that the operation could make thousands of Palestinians homeless.