At least 10 people have been killed in a strike on a UN-run school housing Palestinians displaced by the Gaza conflict, medics say.
Thousands of Palestinians were believed to be sheltering in the facility in Rafah in the southern Gaza Strip.
The Israeli military has not commented but has been carrying out renewed strikes in Gaza.
Gaza health officials say 30 people have died on Sunday, while militants continue to fire rockets into Israel.
The latest exchanges came after Israel's military said that an officer it feared had been captured had now been confirmed dead. Hadar Goldin went missing on Friday near Rafah.
Confirmation of 2nd Lt Goldin's death means 66 Israelis have now died in the fighting, all but two of them soldiers. A Thai worker in Israel also died.
The latest official figures from Gaza's health ministry say that 1,740 Palestinians have been killed and 9,080 injured since the conflict began more than three weeks ago.
The UN warned that a "health disaster of widespread proportions" is unfolding in Gaza, with medical services facing collapse.
The Israeli shelling of the Jabaliya UN shelter last week, which killed 16 people, drew widespread international condemnation.
In the latest attack, eyewitnesses said a missile struck near the entrance to the school.
At least 30 people were also injured, Palestinian officials said.
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"Death and destruction": The BBC's Ian Pannell reports from inside Rafah
On Sunday, Israel said its forces were withdrawing from some areas of Gaza to a "temporary security strip" to reassess operations.
Reports said the military was close to completing its main aim of destroying tunnels used by militants to infiltrate Israel.
Israel Defense Forces spokesman Lt Col Peter Lerner told Agence France-Presse: "We are redeploying within the Gaza Strip and taking out other different positions... so it won't be the same type of ground operation... It's changing gear but it's still ongoing."
However, Prime Minister Benjamin Netanyahu has warned Israel will continue its offensive.
Damaged house in Rafah after Israeli strike, 3 Aug A separate strike on Rafah killed several members of the same family, Gaza officials say
Sister Ayelet and fiancee Edna of Lt Hadar Goldin attend a news conference after his death was confirmed, 2 Aug Sister Ayelet and fiancee Edna of Lt Hadar Goldin attend a news conference after his death was confirmed
"Hamas again mistakenly believes that the people of Israel do not have the will and determination to fight them and Hamas again will learn the hard way that Israel will do whatever it must do to protect its people," he said.
Hamas spokesman Fawzi Barhoum dismissed Mr Netanyahu's comments as "confused" and said the group would "continue to resist until we achieve our goals".
A delegation from Hamas, which controls Gaza, and Islamic Jihad arrived in Cairo on Sunday for talks with Egyptian and US officials over a possible truce.
Hamas is demanding the removal of Israeli troops and the ending of an economic blockade.
However, Israel has said it will not attend the talks.
Israeli Justice Minister Tzipi Livni told the Ynet website: "You want to talk about lifting the blockade? Not with us, and not now."
Chris Gunness, from the United Nations Relief and Works Agency (Unrwa), told the BBC that a "health disaster of widespread proportions is rapidly unfolding in Gaza, with medical services on
Hadar Goldin, 23, went missing after clashes between Israeli soldiers and Hamas fighters in southern Gaza
He said: "Critical supplies of medicines and disposables are almost depleted and the damage and destruction of power supplies has left hospitals dependent on unreliable generators."
Mr Gunness warned that there was a serious risk of an outbreak of waterborne and communicable diseases because of a lack of adequate water and poor sanitation.
Separately overnight, Israel said DNA evidence confirmed that Lt Goldin had died.
Israel's defence minister and the chief military rabbi met the soldier's family at their home in the town of Kfar Saba on Saturday night.
Hundreds of well-wishers had gathered outside their home and there was an outpouring of grief when the military's announcement was made public.
The funeral is expected to take place in Kfar Saba on Sunday afternoon