It was supposed to be an evening of entertainment in Gaza, watching the World Cup semi-final at a cafe, a welcome break from 48 hours of Israeli air strikes.

But the evening was cut brutally short when an Israeli raid flattened the Fun Time Beach cafe in the southern Gaza Strip in the early hours of Thursday, killing nine people and wounding 15.

All that is left of the popular seaside cafe -- where dozens broke their Ramadan fast on Wednesday night before settling down to watch Argentina play the Netherlands -- is a large crater and a few mounds of sand.

The cafe's multicoloured sign is still standing, somewhat crookedly, as colourful bunting and canvas windbreakers lay strewn on the floor, torn down by the force of the blast.

The Israeli missile scattered the dead and wounded across the beach, and made a hole so deep that seawater filled it up from underground after impact.

"It was a normal social occasion," said Wael Soboh, a local policeman who is employed by the Palestinian Authority.

"The boys ate their Ramadan iftar meal here, and then began watching the match. It is not a military area."

Eight people were killed immediately in the blast, medical sources said, all of them residents of the nearby city of Khan Yunis in southern Gaza.

Bulldozers were earlier Thursday busy searching for a ninth man believed to buried underneath the soggy sand, as locals looked on in the searing midday heat.

"It's possible the missing guy was blown to pieces," said another local, Mohammed Astal.

Later, Gaza's emergency services spokesman Ashraf al-Qudra said the body was found, raising the toll in the attack to nine.

- 'Israel won 9-0' -

Residents said three members of an extended family -- Ahmed, Suleiman and Mussa Astal -- were among the dead, with most of those killed in their 20s.

"There was a power cut in Khan Yunis, so a lot of people came here where there's a generator and a screen," said Mohammed al-Aqad, a resident who was at the cafe when the missile hit but was not injured.

The victims were all keen football fans, he said, as were some of the locals who were helping in the search for the missing man.

Asked who they were supporting in the World Cup, one enthusiastically replied: "Argentina, of course!"

"No, Germany," chipped in another, though he was wearing a red England shirt.

There were no goals in Wednesday's match, which eventually went to extra time and ended in penalties.

"And the result from this match here? The Jews won 9-0," Ahmed al-Aqad quipped macabrely.

Israel's operation against militants in Gaza - the deadliest violence since 2012 - entered its third day on Thursday, with the overall death toll rising to at least 78, among them women and children.