Rescue workers initially reported dozens of casualties in the explosion on Sunday, but later revised their figures after medics arrived at the scene.
Scores of soldiers were trapped in the rubble of the attack near the illegal Jewish settlement of Gush Katif.
The resistance movement Hamas claimed the attack in a phone call to Aljazeera.
The al-Aqsa Martyrs Brigades also claimed responsibility for the attack in a statement saying it came in retaliation for the assassination of Hamas leaders Shaikh Ahmad Yasin and Abd al-Aziz al-Rantisi and the leaders killed in Nablus on Saturday.
Aljazeera's correspondent in Gaza, Walid al-Umari, said the Israeli soldiers fully cordoned the area off after the attack and at least 15 ambulances attended the scene.
"The Jewish settlers were ordered not to leave their houses," he reported.
The blast apparently was set off by explosives planted in a tunnel dug near the base, said Yeruham Mendola, a spokesman for the Magen David Adom rescue service.
"There are a lot of people injured at the scene," said Mendola.
Israeli public television interrupted its programmes to give a
report on the attack in which it said hundreds of kilogrammes of explosives were used.
At the same time, the base came under fire from mortars and assault rifles, TV reports said.
Palestinian resistance fighters had vowed to avenge a deadly Israeli military raid into the West Bank city of Nablus in which a top leader from the al-Aqsa Martyrs Brigades was killed on Saturday.
Two Palestinians were also killed by Israeli occupation soldiers shortly after the army post was blown up on Sunday, Palestinian medics and witnesses said.
They said the Palestinians were killed at the town of Khan Yunis.
Early on Monday, Israeli helicopters fired 10 missiles at two metal workshops in Gaza City, setting off fires and causing some damage, but no major injury.
Israeli occupation forces alleged the workshops were being used by Hamas and other militant groups to make weapons, including home-made rockets.