JERUSALEM/ GAZA: Israeli fire killed at least 43 Palestinians in the Gaza Strip early on Wednesday as the Jewish state said it targeted militant militants at dozens of sites across the coastal enclave, while Egyptian mediators prepared a revised ceasefire proposal.
Israel's Channel Two TV said progress was being made to achieve a deal in Cairo, where a Palestinian delegation was expected to arrive for discussions.
Israeli tank shells and air strikes on houses and a school in Jebalya in northern Gaza killed at least 43 people and wounded many others, including 20 in a UN school, health ministry spokesperson Ashraf al Qidra said. Among the dead were a medic and an infant.
An Israeli army spokesperson said she was checking for details.
Eight people, including five members of the same family in Jebalya, were killed in other strikes, Gaza officials said.
Hospital officials put the total number of Palestinians killed in the conflict at 1,224, most of them civilians. On the Israeli side, 53 soldiers and three civilians have been killed since the start of the offensive on July 8.
Israel launched its offensive in response to rocket salvoes fired by Gaza's dominant Hamas militants and their allies.
UNRWA, the main UN relief agency in Gaza, said it was at "breaking point" with more than 200,000 Palestinians having taken shelter in its schools and buildings following calls by Israel for civilians to evacuate whole neighbourhoods before military operations.
The agency acknowledged that it had found a cache of rockets in one school, but blamed no particular party. The body's spokesperson, Chris Gunness, condemned those responsible for placing people in harm's way.
"We condemn the group or groups who endangered civilians by placing these munitions in our school. This is yet another flagrant violation of the neutrality of our premises. We call on all the warring parties to respect the inviolability of UN property." Gunness said in a statement.
The Israeli assault intensified after the deaths of 10 soldiers in Palestinian cross-border attacks on Monday. Prime Minister Benjamin Netanyahu warned of a long conflict ahead.
The security cabinet convenes again on Wednesday to assess the situation in the conflict and consider future steps.
The army said it needed about a week to complete its main mission of destroying cross-border infiltration tunnels and there has been strong Israeli public support for holding course.
Diplomatic pressure also mounted, with Chile and Peru saying they were recalling their ambassadors to Israel.
Chile, a non-permanent member of the United Nations Security Council, is home to one of the world's largest Palestinian communities outside the Middle East, as well as a sizeable Jewish community.
"Chile observes with great concern and discouragement that the military operations - which at this point appear to be a collective punishment to the Palestinian civil population in Gaza - don't respect fundamental norms of international humanitarian law," its foreign ministry said.
In a bid to boost Palestinian spirits and demoralize Israel, Hamas TV aired footage it said showed the group's fighters using a tunnel to reach an Israeli army watchtower on Monday. They are seen surprising an Israeli sentry, opening fire and storming the watchtower compound to surround a fallen soldier.
Mohammed Deif, the shadowy leader of Hamas's armed wing, said in a recorded message on television that Palestinians would continue confronting Israel until its blockade on Gaza - which is supported by neighboring Egypt - was lifted.
"The occupying entity will not enjoy security unless our people live in freedom and dignity," Deif said. "There will be no ceasefire before the (Israeli) aggression is stopped and the blockade is lifted. We will not accept interim solutions."