A large fire that ripped through a home north of Gaza City where fuel was being stored killed at least 21 people including seven children on Thursday, official and medical sources said.

Hamas Islamists, who control the Israeli-blockaded Palestinian enclave, said firefighters had managed to contain the blaze in Jabalia that left charred walls and mounds of black soot before being put out.

Gaza's civil defence unit confirmed in a statement that 21 people had been killed.

The head of the Indonesian Hospital in Jabalia, Saleh Abu Laila, told AFP that the facility had received the bodies of at least seven children.

While the cause of the fire remained unknown, a spokesman for the civil defence unit told AFP that supplies of fuel were stored in the house.

Palestinian president Mahmud Abbas, based in the Israeli-occupied West Bank -- a separate Palestinian territory -- considered the fire "a national tragedy", his spokesman said.

Abbas declared a day of mourning on Friday, with flags to be flown at half-mast, and offered to send aid to families of the victims to "ease their suffering", spokesman Nabil Abu Rudeineh said in a statement.

Senior PA official Hussein Al Sheikh urged Israel to open the Erez crossing that connects Gaza with southern Israel and is normally closed at night.

This would allow the transport of critically-hurt patients "in order to treat them outside the Gaza Strip if necessary", Al Sheikh said.

Israeli Defence Minister Benny Gantz tweeted that his staff would assist with "humanitarian evacuations of the injured to (Israeli) hospitals", expressing sympathy for the "serious disaster" in Gaza.

A large crowd of onlookers gathered on the street outside the multi-storey home as the blaze raged, sending plumes of smoke billowing out the top of the concrete building.

Jabalia is a refugee camp, but like many such Palestinians camps, now includes large buildings and in many respects resembles a city.

Crowds remained on the street, with hundreds of police and emergency response workers on hand, after the blaze had been extinguished.

Gaza, densely populated with 2.3 million people, has been under Israeli blockade since 2007, a measure Israel says is necessary to contain threats from armed groups in the strip.

With electricity supply sparse in the impoverished territory, domestic blazes are common, as Gazans seek alternative sources for cooking and light, including kerosene lamps.

This year Gaza received an average of 12 hours of mains electricity daily, up from just seven hours five years ago, according to United Nations data.

New dangers arise in the winter when many people burn coal for heat.

Hamas said an investigation was underway to determine the cause.