The fire broke out at the top of a three-story building in the crowded Jabaliya refugee camp, according to the Palestinian militant group Hamas.
The Gaza Civil Defense, which is run by Hamas, said it was likely gasoline stored in the building that ignited.
However, it is not clear how the gasoline was ignited, but an investigation has begun.
Why gasoline was stored in the building
Hamas-ruled Gaza is under a crippling Israeli-Egyptian blockade and faces a severe energy crisis.
Residents store cooking gas, diesel and petrol in homes to survive the winter, creating an increased fire risk.
Palestinian President Mahmoud Abbas offered his condolences to the families of the victims and declared Friday a day of mourning.
Hussein Al-Sheikh, a senior politician from the Palestinian National Authority, called on Israel to open its border with Gaza to allow the evacuation of the injured to Palestinian hospitals in the West Bank and Jerusalem, as they need advanced medical care.