The Sussi Tower is the second high-rise to be destroyed in as many days. On Friday social-media footage showed the Mushtaha Tower, in the city's al-Rimal neighbourhood, collapsing after a massive explosion at its base.
The IDF said precautionary measures had been taken to mitigate harm to civilians, "including advance warnings to the population" and the use of "precise munitions".
But Palestinians said displaced families had been sheltering in the Mushtaha Tower, and Gaza civil defence agency spokesman Mahmud Bassal accused Israel of enacting "a policy of forced displacement".
Satellite imagery shows several neighbourhoods in parts of the city have been levelled by Israeli strikes and demolitions over the past month.
The residential and commercial tower blocks in Gaza City represented an important chapter in the city's history, tied to hopes of ending the Israeli occupation and building an independent Palestinian state.
The rise of multi-storey towers – more than five floors – began after the signing of the Oslo Accords in 1993, which allowed tens of thousands of Palestinians to return from exile to Gaza and parts of the West Bank.
Following the Israeli withdrawal from most of Gaza in 1994, vertical expansion became a necessity to accommodate the influx of returnees.
The Palestinian Authority encouraged large investments in the construction sector, with entire neighbourhoods named after the towers.