World Central Kitchen (WCK) said workers from countries including the UK, Poland and Australia were killed.
WCK founder and chef José Andrés said they were killed "in an IDF air strike". The Israel Defense Forces (IDF) said it was conducting a "thorough review".
Gaza's Hamas-run media office also blamed Israel.
The alleged strike could not be immediately verified independently.
A journalist working for the BBC in Gaza has seen the bodies of three international aid workers and a Palestinian driver, recovered from the site of the alleged air strike. Foreign passports were also shown.
WCK later said in a statement that seven of its team had been killed and were Australian, Polish, British, Palestinian and a dual US-Canadian citizen.
"I am heartbroken and appalled that we - World Central Kitchen and the world - lost beautiful lives today because of a targeted attack by the IDF," the charity's CEO Erin Gore said in a statement.
"The love they had for feeding people, the determination they embodied to show that humanity rises above all, and the impact they made in countless lives will forever be remembered and cherished".
Ms Gore said WCK was pausing its operations immediately in the region.
She added that those killed were part of a convoy that was hit while leaving the Deir al-Balah warehouse in central Gaza, "where the team had unloaded more than 100 tons of humanitarian food aid brought to Gaza on the maritime route."
Further details of the alleged attack are still emerging.
Adrienne Watson, a spokesperson for the White House National Security Council, said on X: "We are heartbroken and deeply troubled by the strike that killed [WCK] aid workers in Gaza.
"Humanitarian aid workers must be protected as they deliver aid that is desperately needed, and we urge Israel to swiftly investigate what happened."
Australian Prime Minister Anthony Albanese has affirmed that Lalzawmi "Zomi" Frankcom, an aid worker, was among those who tragically lost their lives. He extended his condolences to the bereaved family and friends.
Expressing his dismay, he stated, "This individual volunteered overseas to offer assistance through this charitable organization to individuals enduring significant hardship in Gaza. Such an occurrence is utterly unacceptable."
Albanese emphasized Australia's expectation for complete accountability, denoting it as a "tragedy that should never have happened".
According to a Palestinian medical source cited by the BBC, the aid workers were equipped with bulletproof vests adorned with the WCK emblem. The organization is presently furnishing meals to thousands in Gaza.
In a social media post, celebrity chef José Andrés urged the Israeli government to cease the indiscriminate violence.
The IDF, in response to the reports, asserted that it was conducting a comprehensive investigation at the highest echelons to ascertain the circumstances of the "heartbreaking incident". They stressed their extensive efforts to facilitate the safe delivery of humanitarian aid and underscored their collaboration with WCK in providing essential sustenance and aid to the people of Gaza.
Prior to confirmation of the Australian national's death, the Australian Foreign Ministry asserted, "We have consistently emphasized the necessity for humanitarian workers in Gaza to have secure and unhindered access to carry out their life-saving tasks".
The UK Foreign Office and Polish Foreign Ministry have been reached out to for their input on the matter.
