According to an official at the Kamel Radwan hospital in nearby Jabaliya, seven people were killed during the raid.
It came as Palestinians began to celebrate Eid al-Fitr, the three-day feast marking the end of the Muslim holy fasting month of Ramadan.
Twenty-three people were also wounded, two of them seriously, the official said.
The casualty toll makes it one of the bloodiest days of fighting during the four-month offensive.
According to witnesses, Israeli forces opened fire and killed Atta al-Shimbari, a local chief of the Popular Resistance Committees.
It was the same militant group that claimed joint responsibility for a cross-border raid on June 25 in which two Israeli soldiers were killed and one seized.
The Israelis opened fire as Shimbari was at his family's house for Eid al-Fitr.
Two of his brothers, Khaled and Kamal, his cousin Ibrahim, his nephew Mohammed and a neighbour, Rami Hamdan, were also killed.
A security official said around 20 Israeli tanks had pushed into the industrial zone of Beit Hanun and fired shells.
Gaza offensive
The army said it had "identified hitting 10 armed gunmen" during an operation to prevent the firing of rockets into the Jewish state.
More than 250 Palestinians and two Israeli soldiers have been killed in Gaza since Israel launched an offensive on the strip three days after the June 25 raid.
The deaths bring to 5,451 the number of people killed since the start of the Palestinian uprising in September 2000, the vast majority of them Palestinians, according to an AFP count.
Palestinian President Mahmoud Abbas slammed the raid.
"The president condemns this massacre... at a time when the Palestinian people are celebrating the feast of Eid al-Fitr," said a statement from his office.
"The president demands the international community to intervene as quickly as possible to stop the Israeli massacres, particularly in the Gaza Strip."
Call for unity
Hamas prime minister Ismail Haniya had earlier appealed for Palestinian unity and continuing resistance to Israel following deadly clashes between supporters of the Islamists and Mr Abbas's Fatah faction.
"Stop the bloodshed, stop using weapons against your brothers, and unite," Mr Haniya told a crowd of about 20,000 gathered in Gaza City.
Supporters of his ruling Hamas movement and Fatah have clashed repeatedly since the Islamists routed Fatah from power in January elections, with the confrontations increasing during the past weeks.
On Sunday, a member of the security services loyal to Abbas was killed in clashes with Hamas forces, two days after gunmen opened fire near Haniya's convoy, the latest of more than two dozen people killed.