An overnight airstrike near Gaza's southern city of Khan Younis has killed five people from the same family, according to hospital officials.

The Kuwait Specialized Field Hospital said Thursday it had received the bodies of five people, including two children, following the late Wednesday strike.

Another 32 people were treated for wounds sustained in the strike on the town of Muwasi, the hospital said.

Relatives of the dead Palestinians wept and wailed over their loved ones' bodies being transported in white body bags through the city of Khan Younis on Thursday.

Some relatives voiced their outrage that people are still being killed during what's supposed to be a cessation of fighting.

Israel said it launched an airstrike on a Hamas militant in retaliation for an attack earlier in the day that wounded five Israeli soldiers.

The strike was the latest test for a fragile ceasefire that has mostly held up since early October, despite claims of violations by both Israel and Hamas.