At least 17 people have been killed in an Israeli strike on a packed Gaza market in a deadly raid that came as Israel was observing a four-hour humanitarian lull.
Thick black smoke billowed over the site in the war-torn Shejaiya neighbourhood as at least five ambulances raced to the scene where bodies lay strewn on the ground, an AFP correspondent said.
At least 17 people were killed and 200 wounded, medics said, on a day that saw at least 108 people killed and the death toll from 23 days of unrelenting Israeli attacks soar to 1359.
It was supposed to have been a rare pause for Gaza's battered population of 1.8 million to go out in safety to stock up on goods, and for medics to evacuate the dead and wounded.
Instead, there was further bloody mayhem with more than 30 people killed across Gaza in the first three hours of the lull alone.
Israel had said its truce, which began at 1200 GMT (2200 AEST Wednesday), would not apply in places were troops were "currently operating," hours after the army made what it called a "significant advance" into the narrow coastal strip.
Hamas denounced the four-hour lull as a publicity stunt, saying it had "no value".
The market strike came hours after Israeli tank shells slammed into a UN school sheltering some 3300 homeless Gazans, killing 16 and drawing a furious response from the United Nations, the United States and France, as well as UNRWA Commissioner General Pierre Krahenbuhl.
Meanwhile, in Israel, the army said three troops had been killed in Gaza, raising the overall number of soldiers killed to 56 since the operation began on July 8.
But there appeared to be no Israeli appetite for a truce, despite an hours-long meeting of the security cabinet, with a senior official telling Haaretz newspaper that the Jewish state wasn't even close to a ceasefire.
Despite the rhetoric, a two-member Israeli delegation arrived in Cairo late on Wednesday to discuss a possible ceasefire with Egyptian officials, an official at the airport told AFP, saying they were expected to leave after several hours.
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