The Israeli army said it had targeted militants on their way to fire rockets at Israel, saying the vehicle was loaded with Katyusha rocket launchers.
The Islamic Jihad militant group said that some of its members had died in the blast.
The exchange of missile attacks between Gaza and Israel has escalated recently.
Scenes of anger
The BBC's Alan Johnston in Gaza says although Israeli strikes on vehicles travelling through the territory have become familiar, Tuesday's attack resulted in one of the heaviest death tolls.
A BBC reporter counted eight bodies being taken to a morgue, including that of a child. Palestinian sources said a second child was also killed.
Palestinian president Mahmoud Abbas accused Israel of engaging in "state terrorism".
Israeli Defence Minister Amir Peretz said Israel had so far been showing restraint, but would no longer do so.
Israel says about 100 rockets have been fired from across the Gaza border in the past few days.
After Tuesday's strike a yellow van was left mangled on the main road through the north of Gaza, while pools of blood lay nearby.
Reports said the first strike was followed soon afterwards by another missile, which hit civilians who had gone to the scene of the first blast.
There were scenes of anger as bloodied civilians were taken to hospital.
At the hospital's morgue, angry women shouted: "Death to Israel, death to the occupation!"
An Israeli army statement said the attack was launched at "a vehicle loaded with rockets and carrying a terror cell en route to launch at Israel".
A spokeswoman said that the van was "loaded with Katyushas".
Katyushas have a longer range than the homemade rockets that are usually launched from Gaza.
Witnesses cited by the Reuters news agency said they saw rockets in the back of the yellow van.
Beach blast
The upsurge in violence follows the deaths of eight Palestinians on a beach in Gaza on Friday.
After those deaths, the militant group Hamas, which heads the Palestinian government, said it was breaking off its voluntary truce and launched rockets at Israel.
The beach explosion was initially blamed on Israeli shelling near the area where a family was enjoying a picnic.
However, an Israeli military inquiry is close to deciding Israel was not responsible, media reports say.
http://news.bbc.co.uk/go/pr/fr/-/2/hi/middle_east/5074798.stm
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