"The wife of the great leader was martyred with his daughter," in a strike on Tuesday night, Hamas's exiled deputy leader Mussa Abu Marzuk wrote on Facebook while saying nothing about the fate of Deif himself.
He said that Israel had been looking for ‘an excuse to target a big Hamas leader’.
Palestinian emergency services revised an earlier report of three killed in the strike on a large house in the city's Sheikh Radwan neighbourhood and said the victims were a woman and a two-year-old girl.
Another 45 people were injured, they said.
Tuesday's deaths were the first as a result of Israeli air raids in Gaza since August 10.
More than a month of fighting between Israel and Hamas has killed at least 2,020 Palestinians and 67 on the Israeli side since July 8.
Deif was appointed head of Hamas's military wing, the Ezzedine al-Qassam Brigades, in 2002 after the death of his predecessor Salah Shehade in a raid.
Deif had survived at least five previous Israeli attempts to kill him.
The brigades said that after the strike Israel had "opened the gates of hell on himself" by the attack.

Gaza ceasefire has 'collapsed': chief Palestinian negotiator

A temporary ceasefire in Gaza has 'collapsed' after a deadline passed with no agreement to extend a truce and Israel and Hamas resumed hostilities, a senior Palestinian official has said.
"The ceasefire has collapsed and Israel is responsible," said Azzam al-Ahmed, the head of a joint-Palestinian delegation in Cairo participating in indirect negotiations with Israel.
"We are leaving tomorrow, but we have not pulled out of negotiations," he said on Monday, adding that the Palestinians were waiting for Israel to respond to their truce proposal.
"We will not come back (to Cairo) until the Israel responds," he said.
Ahmed, an aide of Palestinian president Mahmud Abbas, heads the delegation that includes senior Hamas officials.
One of the Hamas officials, Ezzat al-Rishq, warned Israel "will not enjoy security so long as the Palestinian people do not."

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