The Israeli military later said it had targeted a senior Hamas militant and other members of the group's armed wing who it said were operating inside the hospital in Khan Younis, Reuters news agency reported.
In a statement, the military accused Hamas of using the hospital complex as a command centre for military operations, including storing weapons, operating command-and-control rooms and using hospital facilities as observation posts and shelters for fighters.
Mahmoud Basal, the spokesperson for Gaza's civil defence, said the Israeli airstrike hit the surgery department of the hospital, causing extensive damage.
Medics identified the dead surgeon as Rezik Abushira.
Reuters video from inside the hospital showed extensive damage, with rubble and furniture strewn across rooms and wires dangling from damaged ceilings.
People carried injured patients on stretchers through debris-covered corridors, while others helped the wounded walk through the wreckage. Several bodies were also seen being carried away as firefighters worked outside.
A Hamas spokesperson condemned the strike as a "fully-fledged war crime".
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Israel, which has stepped up its attacks on the enclave, says Hamas is trying to regroup and rebuild its arsenal. Hamas says it is committed to a year-old ceasefire and accuses Israel of trying to undermine the agreement.
At least 1,600 Palestinians have been killed in Israeli attacks in Gaza since the deal was agreed, according to the territory's health officials, while Israel says four soldiers have been killed.