Israel has launched some 5,000 airstrikes against Gaza in nearly seven weeks of fighting with Hamas, but Saturday's strike marked the first time an entire high-rise was toppled.
The explosion shook nearby buildings.
Gaza police say Israeli aircraft fired a warning missile at the roof of the tower at dusk, followed five minutes later by two missiles with explosives.
Ayman Sahabani, the head of the emergency room at Gaza City's Shifa Hospital, said at least 22 people were wounded, including 11 children and five women.
The leveling of the tower was a further sign of escalation following a breakdown of Egyptian-brokered cease-fire talks and the collapse of a temporary truce earlier this week.
Earlier Saturday, the Egyptian Foreign Ministry urged Israel and Hamas to resume indirect talks and agree to an open-ended cease-fire.
The appeal came after Western-backed Palestinian President Mahmoud Abbas met with Egyptian President Abdel-Fattah el-Sissi in Cairo. Egyptian officials did not say how they expected renewed talks to produce a different outcome after repeated failures.
Israeli government spokesman Mark Regev had no immediate comment regarding the renewed call for a cease-fire. Sami Abu Zuhri, a spokesman for Gaza's ruling Hamas, said the group would consider the Egyptian appeal, but there was no sign it would budge from longstanding demands.