An Israeli strike on a five-story building where displaced Palestinians were sheltering in the northern Gaza Strip killed at least 60 people early on Tuesday, more than half of them women and children, Gaza's Health Ministry said.

In a separate development, Lebanon's militant group Hezbollah said it has chosen Sheikh Naim Kassem as its new top leader following the killing of Hassan Nasrallah in an Israeli airstrike last month.

Israel also faced backlash from aid groups after its parliament passed legislation that could severely restrict the ability of the UN agency for Palestinian refugees to operate in the Palestinian territories. The agency, known as UNRWA, is the largest aid provider in Gaza.

Hezbollah said in a statement that its decision-making Shura Council elected Kassem, who had been Nasrallah's deputy leader for over three decades, as the new secretary-general. Hezbollah vowed to continue with Nasrallah's policies “until victory is achieved”.

Kassem, 71, a founding member of the militant group established following Israel's 1982 invasion of Lebanon, had been serving as acting leader after Nasrallah was killed on September 27.

He has given several televised speeches vowing that Hezbollah will fight on despite a string of setbacks.

Hezbollah began firing rockets into Israel, drawing retaliation, after Hamas' surprise attack out of Gaza on October 7, 2023, triggered the war there. Iran, which backs both groups, has also traded fire with Israel on two occasions.

The tensions with Hezbollah boiled over last month, as Israel unleashed a wave of heavy airstrikes and killed Nasrallah and most of his senior commanders. Israel launched a ground invasion into Lebanon at the start of October.

Strike in northern Gaza comes as Israel wages a major operation there

Even as attention has shifted to Lebanon and Iran in recent weeks, Israel has continued to wage a large operation in northern Gaza and to carry out airstrikes across the territory.

Dr. Marwan al-Hams, director of the field hospitals' department at the Gaza Health Ministry, announced the toll from Tuesday's strike in the northern town of Beit Lahiya at a news conference. He said another 17 people are missing.

The ministry's emergency service said at least 12 women and 20 children were among the dead, including babies.

There was no immediate comment from the Israeli military, which has been waging the operation in northern Gaza for more than three weeks, targeting what it says are pockets of Hamas militants who have regrouped there.

The dead included a mother and her five children, some of them adults, and a second mother with her six children, according to an initial casualty list provided by the emergency service.

Dr. Hossam Abu Safiya, the director of the nearby Kamal Adwan Hospital, said it was overwhelmed by the wave of wounded people from the strike. Israeli forces raided the medical facility over the weekend, detaining dozens of medics. The army said it detained scores of Hamas militants.

“The healthcare system has completely collapsed," Abu Safiya said in a voice message to journalists on Tuesday. He said people who arrive wounded are dying because there is no care for them.

The Israeli military has repeatedly struck shelters for displaced people in recent months, saying it carried out precise strikes targeting Palestinian militants and tried to avoid harming civilians. The strikes have often killed women and children.

The military said it detained scores of Hamas militants in the raid on Kamal Adwan, the latest in a series of raids on hospitals since the start of the war.

Israel's latest major operation in northern Gaza, focused on the Jabaliya refugee camp, has killed hundreds of people and driven tens of thousands from their homes in another wave of mass displacement more than a year into the war in the tiny coastal territory.

Israeli laws targeting UN agency could further restrict aid

Israel has also sharply restricted aid to the north this month, prompting a warning from the United States that failure to facilitate greater aid efforts could lead to a reduction in military aid.

Palestinians fear Israel is enacting a plan proposed by a group of former generals, who suggested the civilian population of the north should be ordered to evacuate, aid supplies should be cut off, and anyone remaining there should be considered a militant.

The military has denied carrying out such a plan while the government has not said clearly whether it is carrying out all or part of it.

On Monday, Israel's parliament passed two laws that ban UNRWA from operating on Israeli soil and cut all ties between the agency and the Israeli government. Israel controls access to both Gaza and the occupied West Bank, and it was unclear how the agency would continue to operate there.

Israel says UNRWA has been infiltrated by Hamas and that the militant group siphons off aid and uses UN facilities to shield its activities, allegations denied by the UN agency.

Aid groups have warned that there is no immediate replacement for UNRWA, which provides education, health care and emergency aid to millions of Palestinian refugees from the 1948 war surrounding Israel's creation and their descendants. Refugee families make up the majority of Gaza's population.

“Severing this lifeline in Gaza as winter threatens to exacerbate an already desperate situation is cruel and dangerous,” said William Bell, the Middle East head of Christian Aid, a British charity.

The war in Gaza began when Hamas-led militants stormed into Israel on October 7, 2023, killing some 1,200 people, mostly civilians, and abducting around 250. Some 100 hostages are still inside Gaza, a third of whom are believed to be dead.

Israel's retaliatory offensive has killed over 43,000 Palestinians, according to local health authorities. Around 90 per cent of the population of 2.3 million have been displaced from their homes, often multiple times.