Israeli fire yesterday pushed the Palestinian death toll in Gaza to above 800, as Washington pressed Israel and Hamas to agree to a week-long humanitarian ceasefire and thrash out a durable truce.
In the West Bank, Palestinian factions declared a "Day of Rage" after a night of clashes over Israel's Gaza offensive, with one Palestinian killed.
Among those killed in an air strike on Gaza yesterday were two women, one of them pregnant, adding to a spiralling toll of Palestinian civilian casualties from Israel's military operation, now in its 18th day, aimed at halting militant rocket fire.
Israeli aircraft struck 30 houses in the Gaza Strip last night, killing a leader of the militant Islamic Jihad group and two of his sons.
And the Israeli shelling of a United Nations facility sheltering displaced Gazans killed at least 15 civilians and has drawn widespread international condemnation.
UN chief Ban Ki-moon said he was "appalled" at the shelling which "underscores the imperative for the killing to stop - and to stop now".
Washington said it was "deeply saddened and concerned about the tragic incident", without explicitly blaming its ally Israel.
Amid intense international pressure on both sides to cease fire, Israel's security cabinet was to meet overnight to discuss a truceproposal passed to Prime Minister Benjamin Netanyahu by United States Secretary of State John Kerry, media reported.
It proposes a week-long humanitarian ceasefire that would allow Hamas, the de facto power in Gaza, to save face after having rejected an Egyptian initiative last week that proposed a lasting truce first and negotiations later.
According to Western and Palestinian officials, once a humanitarian lull takes hold, delegations from Israel and Hamas would arrive in Cairo - which has mediated past conflicts between the two - for indirect talks that could lead to a lasting truce.
"The way it's going is there will be a humanitarian truce declared for seven days, and then everyone comes to Cairo for the talks," said an official with President Mahmoud Abbas's Palestinian Authority in the West Bank.
Kerry reached out to Hamas allies Turkey and Qatar and was joined in Cairo by UN chief Ban and British Foreign Secretary Philip Hammond to push forward the plan, diplomats said.
Hamas's exiled leader Khaled Meshaal, however, told the BBC in an interview that any truce must include a guaranteed end to Israel's eight-year blockade of Gaza.
"We want a ceasefire as soon as possible, that's parallel with the lifting of the siege of Gaza," he said.
The latest truce efforts came on the last Friday of Ramadan, as Israel braced for West Bank and east Jerusalem unrest after Palestinian factions declared a "Day of Rage" in the West Bank and Israeli police restricted entry to the Al Aqsa compound to men aged 50 and above.
One Palestinian was killed and 150 injured in clashes with Israeli forces in the West Bank, Palestinian medics said, with Israeli police arresting 29 in east Jerusalem.
In Gaza, an Israeli air strike on Khan Younis killed Salah Hasanein, a local leader for Islamic Jihad, and his nephew, security sources said.
Attacks on a house in the southern Gaza town of Deir el-Balah killed a woman of 26 and another aged 23 who was pregnant, Palestinian emergency services spokesman Ashraf al-Qudra said.
Three other people wounded earlier in shelling of Khan Younis died of their wounds, Qudra said, bringing the number of Gazans killed in the Israeli campaign to 808.
Yesterday's strike hit a UN school sheltering some of the 100,000 Palestinians driven from their homes after weeks of deadly fighting between Israeli troops and Hamas militants.
The shell hit a courtyard where people were camped, killing least 15 people and wounding more than 200.
"Many have been killed - including women and children, as well as UN staff," Ban said.
The UN agency for Palestinian refugees (UNRWA) said that before the strike it had been trying to coordinate with the army to evacuate civilians, without success.
Israeli army spokesman Lieutenant Colonel Peter Lerner suggested rocket-firing militants near the school could have caused the deaths.
He also disputed the claim that Israel had rejected a humanitarian truce around the school, saying it had implemented a four-hour window for evacuations.
The Gaza-based Palestinian Centre for Human Rights has said more than 80 per cent of the casualties so far have been civilians, a quarter of them children, triggering growing international alarm.
UN humanitarian chief Valerie Amos expressed deep concern over the mounting civilian casualties, saying it was "almost impossible" for Palestinians to shelter from Israeli air strikes in the densely populated territory.
A military spokeswoman told AFP that militants had fired two rockets at southern Israel yesterday, bringing the number of rockets and mortar rounds from Gaza that hit Israel since July 8 to 1850, with another 470 intercepted by the Iron Dome defence system.
Thirty-two Israeli soldiers have been killed, and Hamas rocket attacks have killed two Israeli civilians and a Thai worker.