Israel said its military would hold fire in most of the Gaza Strip for seven hours on Monday to facilitate the entry of humanitarian aid and for displaced Palestinians to return to their homes, but would fight back if attacked.
The humanitarian truce, beginning at 10 a.m. (0700 GMT), would not apply in areas of the southern Gaza town of Rafah where Israeli forces are still operating, a Defence Ministry official said in a statement.
An Israeli air strike killed 10 people and wounded about 30 on Sunday in a U.N.-run school in the southern Gaza Strip, a Palestinian official said, as dozens died in Israeli shelling of the enclave and Hamas fired rockets at Israel.
U.N. Secretary-General Ban Ki-moon described the attack as a "moral outrage and a criminal act" and called for those responsible for the "gross violation of international humanitarian law" to be held accountable.
The United States was "appalled by today's disgraceful shelling" and urged Israel to do more to prevent civilian casualties, according to a statement by State Department spokeswoman Jen Psaki. She also called for an investigation into recent attacks on U.N. schools.
It was the second strike on a school in less than a week
The Israeli military said it had "targeted three Islamic Jihad terrorists on board a motorcycle in the vicinity of an UNRWA school in Rafah" and added it was "reviewing the consequences of this strike."
Islamic Jihad did not report any of its militants killed or injured in the incident. A Palestinian health official said all those wounded or killed were from inside the school.
Amid Hamas accusations that Israel had misled the world about the alleged capture of an Israeli soldier, the officer, Lieutenant Hadar Goldin, was buried on Sunday after the military said it recovered remains and he was killed in action.
Goldin's suspected abduction led to the collapse of a U.S.- and U.N.-brokered ceasefire on Friday. In Cairo, efforts to find a new truce were due to resume on Sunday.
Israeli media, on the 27th day of the fighting, reported that most Israeli troops had pulled out of Gaza. Reuters TV footage showed a column of Israeli tanks and dozens of infantrymen leaving the enclave.
An Israeli military spokesman stopped short of calling the move a withdrawal, but said residents from some evacuated Gaza neighborhoods had been told by the army they could return.
"The troops are in the midst of a redeployment to other parts of the border," said Lieutenant-Colonel Peter Lerner.
"Indeed we are releasing troops from the front line but the mission is ongoing," he said. "Ground forces are operating. Air forces are operating."
In the town of Rafah, where the military has been battling militants, a missile from an Israeli aircraft struck the entrance to the U.N.-run school, where Palestinians who had fled their homes were sheltering, witnesses and medics said.
Ashraf Al-Qidra, spokesman for the Gaza health ministry, said 10 people had been killed and 30 wounded, all from inside the school.
Robert Serry, U.N. Middle East Special Coordinator, said the school had been sheltering 3,000 displaced persons and the strike caused multiple deaths and injuries.
"It is simply intolerable that another school has come under fire while designated to provide shelter for civilians fleeing the hostilities," he said.
Last Wednesday, at least 15 Palestinians who sought refuge in a U.N.-run school in Jabalya refugee camp were killed during fighting, and the U.N. said Israeli artillery had apparently hit the building. The Israeli military said gunmen had fired mortar bombs from near the school and it shot back in response.