According to Hamas, its forces raided the neighbourhood to detain individuals accused of collaborating with Israel.
Local accounts, however, described an armed assault by about 50 men riding in five pickup trucks, armed with assault rifles and a rocket-propelled grenade (RPG) launcher, who stormed the al-Mujaida quarter and killed five members of the family.
Armed relatives quickly fought back, sparking hours-long clashes with heavy gunfire.
Reports circulating on social media – difficult to independently verify – claim that more than 11 Hamas members were killed, with some of their bodies dragged through the streets.
Videos widely shared online, which the BBC has not verified, appear to show several bloodied bodies in military fatigues, alongside a voiceover alleging they belonged to Hamas's "Sahm Unit".
Another clip captured bursts of gunfire and an RPG hitting a residential building in the neighbourhood.
Local elders later intervened to mediate between the two sides, leading to an exchange of bodies aimed at containing the escalation.
While the exact motives remain unclear, the incident has heightened anxiety among Palestinians.
Many fear that widespread weapons, tensions between powerful families and Hamas's grip on power could spiral into scenes resembling civil war in a territory already gripped by displacement, destruction, and fear of further lawlessness.
It is not just the extent of anger which Hamas faces from its many opponents whom it has humiliated during its 17 years in power which is thought to be a key factor driving the group to reject Donald Trump's ceasefire plan. It is also the fear of violent retribution, of being killed in the street, since the plan requires Hamas to completely disarm.
The head of its military wing in Gaza has indicated he does not agree to the plan, which Trump unveiled on Tuesday, the BBC understands. The president has given the group until 18:00 EDT (22:00 GMT) on Sunday to agree to it, or face "all Hell".