Islamic group Hamas said the house belonged to one of the group's commanders, and blamed the blast on an Israeli airstrike. Israel has denied responsibility.
Rescuers are currently working at site, near Beit Lahiya, searching for an unknown number of people believed to be trapped under the debris.
A few hours earlier in the same area three militants were killed by the Israeli military. On Wednesday four people died during an Israeli ground operation.
Violence continues to spiral in the enclave despite a decision by the Israeli government to consider an Egyptian-mediated truce with Hamas.
On Wednesday the Israeli Cabinet discussed a possible ceasefire in the Hamas-controlled Gaza Strip, but a spokesperson for Israeli Prime Minister Ehud Olmert said Tel Aviv would continue to draw up plans for a ground operation in Gaza in case the truce fails.