One doctor condemned what he called “a massacre” at Al-Ahli Arab Hospital, while another spoke of a scene of total devastation.
Palestinian officials say the blast was caused by an Israeli air strike.
But the Israeli military say it was the result of a failed rocket launch by Palestinian Islamic Jihad – an accusation the militant group rejected.
Israeli warplanes and artillery have been bombarding Gaza in response to an unprecedented attack on Israel on 7 October by the main Palestinian militant group, Hamas, which killed 1,400 people.
More than 3,000 people have been reported killed by strikes on Gaza.
The hospital blast is threatening efforts to resolve the humanitarian crisis there, with Jordan cancelling a planned summit on Wednesday between US President Joe Biden, King Abdullah and the Palestinian and Egyptian leaders.
Mr Biden is still travelling to Tel Aviv to show his country’s “solidarity with Israel” and “ironclad commitment to its security”.
Pictures that emerged from Al-Ahli Arab hospital on Tuesday night show scenes of chaos, with bloodied and maimed casualties being rushed out on stretchers in the darkness. Bodies and wrecked vehicles can be seen lying in the rubble-strewn street outside.
“We were operating in the hospital, there was a strong explosion, and the ceiling fell on the operating room. This is a massacre,” said Dr Ghassan Abu-Sittah, a Médecins Sans Frontières plastic surgeon who had been helping to treat people wounded in the war.
We were operating in the hospital, there was a strong explosion, and the ceiling fell on the operating room. This is a massacre,” said Dr Ghassan Abu-Sittah, a Médecins Sans Frontières plastic surgeon who had been helping to treat people wounded in the war.
Another doctor told the BBC that 80% of the hospital had been taken out of service and estimated that 1,000 people had been killed or injured.
The Ahli al-Arab hospital is fully funded by the Anglican Church, which says the facility is independent of any political factions in Gaza.
Canon Richard Sewell, the dean of St George’s College in Jerusalem and one of the Church’s top figures in the holy city, said it was difficult to get reliable information about what happened but that he could confirm the hospital had been hit and that a “horrific number of people” had died.