It was unclear whether Deif was killed, the security official said.
Deif was one of the masterminds of Hamas' October 7 attack on Israel that triggered the war in Gaza.
The Gaza health ministry said at least 71 Palestinians had been killed in the strike and 289 injured.
A senior Hamas official did not confirm whether Deif had been present and called the Israeli allegations "nonsense".
Israel has retaliated by military action in Gaza that has killed more than 38,000 Palestinians, medical authorities in Gaza say.
Palestinians gather near damages, following an Israeli strike at a tent camp in Khan Younis
An Israeli airstrike targeted Hamas' military chief Mohammed Deif in Gaza on Saturday, a security official and Israel Army Radio said, in an attack that the enclave's health ministry said had killed at least 71 Palestinians.
It was unclear whether Deif was killed, the security official said. Army Radio said Deif was hiding in a building in the Israeli-designated humanitarian zone Al-Mawasi, west of the southern city of Khan Younis.
Deif was one of the masterminds of Hamas' October 7 attack on Israel that triggered the war in Gaza. He has survived seven Israeli assassination attempts, the most recent in 2021, and has topped Israel's most-wanted list for decades.
The Gaza health ministry said at least 71 Palestinians had been killed in the strike and 289 injured.
Israeli Defence Minister Yoav Gallant was holding special consultations, his office said, in light of "developments in Gaza". It was unclear how the strike would affect ceasefire talks underway in Doha and Cairo.
The Hamas-run media office said at least 100 people had been killed and wounded, including members of the Civil Emergency Service. The Israeli military said it was looking into the report.
A senior Hamas official did not confirm whether Deif had been present and called the Israeli allegations "nonsense".
"All the martyrs are civilians and what happened was a grave escalation of the war of genocide, backed by the American support and world silence," Abu Zuhri told Reuters, adding the strike showed Israel was not interested in reaching a ceasefire deal.
Attack "Surprising", Say Witnesses
Reuters footage showed ambulances racing towards the area amidst clouds of smoke and dust. Displaced people, including women and children, were fleeing in panic, some holding belongings in their hands.
Witnesses said the attack was a surprise as the area had been calm, adding more than one missile had been fired. Some of the wounded, who were being evacuated were rescue workers, they said.
"They're all gone, my whole family's gone.. where are my brothers? They're all gone, they're all gone. There's no one left," said one tearful woman, who did not give her name.
"Our children are in pieces, they are in pieces. Shame (on you)," she added.
Rising up the Hamas ranks over 30 years, Deif developed the group's network of tunnels and its bomb-making expertise. He is held responsible for the deaths of dozens of Israelis in suicide bombings.
Hamas-led militants killed 1,200 people and took more than 250 hostages in a cross-border raid into southern Israel on October 7, according to Israeli tallies.
Israel has retaliated by military action in Gaza that has killed more than 38,000 Palestinians, medical authorities in Gaza say.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
