More than 40 people have been killed in an Israeli airstrike that hit a café near the port in Gaza City, according to the head of the territory’s largest hospital.

Dr Mohammad Abu Silmiya, the director of Al-Shifa hospital, said in an update on Monday night that at least 41 people had been killed and 75 injured in the strike.

Videos geolocated by CNN show thick smoke rising from the scene, as well as widespread damage to the café and the surrounding area. They also showed bodies being removed on stretchers.

Know the news with the 7NEWS app: Download today

The Israel Defence Forces said the incident is “under review”.

In response to questions about the strike, the IDF said: “Earlier today (Monday), the IDF struck several Hamas terrorists in the northern Gaza Strip. Prior to the strike, steps were taken to mitigate the risk of harming civilians using aerial surveillance.”

The Al-Baqa café was a well-known spot for students, journalists and remote workers, as it offered internet and a place to work by the Mediterranean coast.

Silmiya said “most of the casualties are women and children”, including many students who were at the café for internet access.

He also said the hospital was short of ICU beds and anaesthetics to treat the casualties. The death toll increased Monday night after some people died from their injuries.

“We are treating the injured on the hospital floor as no rooms and hospital beds are available,” the hospital director added.

Among those killed was a freelance journalist, Ismail Abu Hatab, according to other journalists at the scene.

The Hamas-controlled Government Media Office said his death brought to 228 the number of journalists killed by Israeli military action in Gaza since October 2023.

A Palestinian man checks an area near the café that was damaged in an Israeli strike on Monday. Credit: AP

A mourner attends the funeral of Palestinians killed in an Israeli airstrike on Al-Baqa cafeteria. Credit: Reuters

News of the strike comes as Israeli leaders debate how to proceed with the war in Gaza ahead of an expected meeting between Prime Minister Benjamin Netanyahu and US President Donald Trump on July 7.

A source familiar with the discussions said Israel had yet to reach a policy decision after two consecutive days of meetings between Netanyahu and his most senior advisers and ministers.

However, the source said Netanyahu is interested in a ceasefire deal.

Trump has openly pushed for an end to the war in Gaza, saying on Friday a ceasefire will be agreed to “within a week”.

The small group of Israel’s most senior government officials includes far-right ministers like Itamar Ben Gvir and Bezalel Smotrich, who have both loudly advocated for an intensification of the bombardment of Gaza, and other officials like Aryeh Deri, who favor a comprehensive hostage deal that would bring about the end of the war.

Ben Gvir, head of the Jewish Power party, insisted that a “decisive move” must be made in Gaza and expressed frustration that Israel was wasting time and opportunities with each passing day, the source said.

Netanyahu is trying to reach a decision before his trip to Washington, DC, to meet Trump, the source said, adding that they may have to come to a decision this week.

On Sunday, Netanyahu said “many opportunities have opened up” following Israel’s military operations in Iran, including the possibility of bringing home the remaining hostages held in Gaza.