GAZA - Israeli tank shells killed at least 40 Palestinians on Tuesday at a U.N. school where civilians had taken shelter, medical officials said, in carnage likely to boost international pressure on Israel to halt a Gaza offensive.
An Israeli army spokeswoman said she was looking into information on the incident at al-Fakhora school in Jabalya refugee camp, on the fourth day of a ground assault launched after a week of air strikes failed to end Hamas rocket salvoes.
People cut down by shrapnel lay in pools of blood on the street. Witnesses said two Israeli tanks shells exploded outside the school, killing at least 40 civilians -- Palestinians who had taken refuge there and residents of nearby buildings.
"I am not familiar with the news," Israeli Foreign Minister Tzipi Livni said, asked by reporters about incident.
"Unfortunately, (Hamas fighters) are hiding amongst civilians," she said, adding that Israel was trying to avoid civilian casualties.
In a separate incident earlier in the day, three Palestinians were killed in an air strike on another school run by the United Nations Relief and Works Agency.
The deaths in Gaza, home to 1.5 million people, raised to 75 the number of Palestinian civilians killed on Tuesday alone, according to medical officials.
The spike in civilian casualties could prove to be a turning point in Israel's "Operation Cast Lead," launched on December 19 with the declared aim of removing the Hamas rocket threat.
The killing of dozens of unarmed Lebanese in Israel's bombing in the village of Qana in the 2006 Lebanon war drained foreign support for its campaign against Hezbollah guerrillas. Israel said it had not known civilians were in the area.
In Washington, State Department spokesman Sean McCormack said the United States would like to seen "an immediate ceasefire that is durable, sustainable and not time-limited."
International efforts already under way to end the fighting have focused on securing a truce deal that would meet Israel's demand that Hamas, an Islamist group in charge of the Gaza Strip, could not rearm once hostilities end.
"If there is an end to terror, an end to the smuggling of ammunition from Sinai to Gaza, the Israeli fighting will stop," Israeli Prime Minister Ehud Olmert said, referring to rockets and other weaponry Hamas obtains through tunnels under the Gaza-Egypt border.
In fighting on Tuesday, Israeli forces pushed into the southern town of Khan Younis and battled Hamas militants on the outskirts of the city of Gaza. Palestinian medical officials said four militants were killed.
According to the Palestinian Health Ministry in the Gaza Strip, at least 629 Palestinians have been killed and more than 2,700 wounded since Israel began its offensive.
Ten Israelis, including three civilians hit by rocket fire, have been killed in the conflict. At least five rockets landed in Israel on Tuesday, including one that hit the town of Gadera, 28 km (17 miles) from Tel Aviv. A three-year-old girl was wounded.
A senior Israeli official said French President Nicolas Sarkozy, on a Middle East visit and in partnership with Egypt, was pursuing "a serious initiative" for a ceasefire.
Commenting on the deaths at Jabalya school, Sarkozy said during a visit to French U.N. peacekeepers in south Lebanon: "It reinforces my determination for all this to stop as quickly as possible. Time is working against us. We must find a solution."
Talks were focusing, the Israeli official said, on the size of an "international presence" along the blockaded Gaza-Egypt border, where rockets and other weapons have reached Hamas through a network of tunnels.
Tony Blair, the Middle East envoy of major powers sponsoring Israeli-Palestinian peace talks, said Sarkozy, the European Union and the United States were all in agreement that new anti-smuggling measures would be needed to clinch a ceasefire.
"What is being talked about is a credible plan to stop the smuggling," Blair, a former British prime minister, told reporters in Jerusalem.
He said he hoped the plan could be completed quickly and that enhanced Israeli security would lead to "a significant advance in opening up Gaza to the outside world."
Hamas, which has rebuffed Western demands to recognize Israel, end violence and accept existing interim peace deals, has demanded a lifting of the blockade of the Gaza Strip in any future ceasefire. It seized the territory in 2007.
Most of the deaths reported by Gaza hospitals in recent days have been civilians.
The Israeli military said it killed 130 militants since it began a ground assault on Saturday, a figure that suggested the total Palestinian death toll might be close to 700 and that bodies could still be on the battlefield.
Many of the Gaza Strip's 1.5 million people lack food, water or power. In southern Israel, schools remained closed and hundreds of thousands of people have been rushing to shelter at the sound of alarms heralding incoming rockets.
(Additional reporting by Adam Entous in Jerusalem, Writing by Jeffrey Heller and Alastair Macdonald, Editing by Samia Nakhoul)