(Adds Israel denying responsibility)
GAZA, July 28 (Reuters) - A huge explosion in a public garden in northern Gaza killed eight children and two adults, and wounded 40 others, Palestinian medics said on Monday.
Locals blamed the blast on an Israeli air strike, but Israel denied responsibility, saying it was a misfire by a rocket launched by Hamas militants.
At roughly the same time, another blast shook the grounds of Gaza's main Shifa hospital, without causing any casualties. Israel, which has previously accused Hamas militants of hiding in the hospital, again blamed an errant missile.
Pools of blood lay on the ground in the Beach refugee camp garden in the aftermath of the explosion.
"We came out of the mosque when I saw the children playing with their toy guns. Seconds later a missile landed," said Munther Al-Derbi, a resident of the camp.
"May God punish ... Netanyahu," he said, referring to Israeli Prime Minister Benjamin Netanyahu.
Israel and Palestinian militants in Gaza have been locked in three weeks of fighting which have killed 1,049 people in Gaza, mostly civilians.
Some 43 Israeli soldiers have also died along with three civilians killed by Hamas rockets and mortars that hit Israel.
Monday's blasts came during a relative lull in the fighting, with the two sides lowering the temperature to coincide with the Muslim holiday of Eid al-Fitr. (Reporting by Nidal al-Mughrabi; Writing by Noah Browning; Editing by Crispian Balmer)