At least 10 people have been killed
in a strike at a UN-run school housing Palestinians displaced by the Gaza
conflict, medics say.
The attack hit the entrance of the facility in Rafah, where thousands of Palestinians are said to be sheltering.
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.
"On the brink of collapse": Chris Gunness from the United
Nations talks to the BBC
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.
Forces redeployed
The Israeli shelling of the Jabaliya UN shelter last week, which killed 16 people, drew widespread international condemnation.
In the latest attack, Robert Turner, director of operations for the UN Palestinian refugee agency in Gaza, said: "The initial report says that there was some kind of air strike in a street outside one of our shelters."
Eyewitnesses said a missile struck as people queued for food.
At least 30 people were also hurt, Palestinian officials said. Images showed injured children being carried away.
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."
Israel has vowed to continue its Gaza operations
until security is restored However, Prime Minister Benjamin Netanyahu has warned Israel will continue its offensive.
"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.
The attack struck the entrance of the school, where
people were reportedly waiting for food 
A boy wounded in a separate attack in Rafah on Sunday
is taken for treatment 
Sister Ayelet and fiancee Edna of Lt Hadar Goldin
attend a news conference after his death was confirmed 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."
Funeral
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 the verge of collapse".
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 Moshe Yaalon and the chief military rabbi met the soldier's family at their home in Kfar Saba on Saturday night.
It was revealed on Sunday that Mr Yaalon was a distant relative but that this had been concealed as it was feared it might have been used by Hamas if Lt Goldin were being held captive.
Mr Yaalon said: "Hadar Goldin... was a member of my family. I've known him since he was born." BBC
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