Witnesses said the attack happened while people were waiting in line for food supplies. In a chaotic scene inside the school's compound, several bodies, including some children, were strewn across the ground in puddles of blood. Bloody footprints stained the ground where people had rushed the wounded into ambulances.

Israel struck several targets in Gaza yesterday. Artillery shells slammed into two high-rise office buildings in downtown Gaza City and large explosions could be heard seconds apart, police and witnesses said.

In nearly four weeks of fighting, more than 1,700 Palestinians, mainly civilians, have been killed as well as nearly 70 Israelis, almost all soldiers.

Speaking in Cairo, Chinese Foreign Minister Wang Yi called on Israel and Hamas to stop fighting and urged the mainly Jewish state to lift its blockade of Gaza.

"Both sides should immediately and comprehensively cease fire, including air strikes, ground operations and rocket fire," Wang urged during a press conference with his Egyptian counterpart, Sameh Shoukri.

While fighting continued, several Israeli tanks and other vehicles were seen leaving Gaza.

In a televised address late on Saturday, Netanyahu suggested troops would reassess operations after completing the demolition of tunnels being used by Hamas militants.

At the same time, he warned Hamas rulers that they would pay an "intolerable price" if militants continued to fire rockets at Israel and that all options remain open.

"We will take as much time as necessary, and will exert as much force as needed," he said.

The Israeli military death toll rose to 64 after Israel announced that Hadar Goldin, 23, an infantry lieutenant feared captured in Gaza, was actually killed in battle. Israel had said earlier that it feared Goldin had been captured by Hamas militants alongside two other soldiers who were killed on Friday near Rafah in an ambush.

Watch: China Foreign Minister urges Israel, Hamas to stop Gaza fighting

Associated Press, Bloomberg, Agence France-Presse