Israel's military said on Sunday it had carried out a precise strike on a Hamas compound in the southern Gaza city of Rafah, killing two Hamas leaders, but that it was reviewing the incident following reports that the strike caused a fire and civilians were harmed.

"An IDF aircraft struck a Hamas compound in Rafah in which significant Hamas terrorists were operating. The strike was carried out against legitimate targets under international law, using precise munitions and on the basis of precise intelligence that indicated Hamas' use of the area," the military said.

"The IDF is aware of reports indicating that as a result of the strike and fire that was ignited several civilians in the area were harmed. The incident is under review," it said.

Senior Hamas members Yassin Rabia and Khaled Nagar were reportedly killed in the strike, according to the Israeli government's public Telegram channel.