CAIRO/JERUSALEM (June 6): Israel hit a Gaza school on Thursday in an airstrike that it said targeted and killed Hamas fighters inside, while a Hamas official said 40 people including women and children were killed as they sheltered in the UN site.

Ismail Al-Thawabta, the director of the Hamas-run government media office, rejected Israel's assertion that the UN school in Nuseirat, in central Gaza, had hidden a Hamas command post.

"The occupation uses...false fabricated stories to justify the brutal crime it conducted against dozens of displaced people," Thawabta told Reuters.

Israel's military said it had taken steps to protect civilians before its fighter jets carried out a "precise strike", circulating satellite photos highlighting two parts of a building where it said the fighters were based.

"We're very confident in the intelligence," military spokesperson Lt Col Peter Lerner told a briefing with reporters, accusing Hamas and Islamic Jihad fighters of deliberately using UN facilities as operational bases.

He said 20-30 fighters were located in the compound, and many of them had been killed, but had no precise details as intelligence assessments were being carried out. "I'm not aware of any civilian casualties and I'd be very, very cautious of accepting anything that Hamas puts out," he said.

The school, run by the UN Palestinian refugee agency (UNRWA), may have been hit several times, said the agency's communications director, Juliette Touma.

She said she could not confirm the death toll at this stage. Media in Hamas-run Gaza had earlier put the toll at 35-40. Thawabta and a medical source said 40 had been killed, including 14 children and nine women.

Israel announced a new military campaign in central Gaza on Wednesday as it battles fighters relying on hit-and-run insurgency tactics. It says there will be no halt to fighting during ceasefire talks, which have intensified since US President Joe Biden outlined a proposal on Friday.

Since a week-long truce in November, all attempts to arrange a ceasefire have failed with each side blaming the other.

Israel says it is prepared to discuss only temporary pauses until the Islamist militant group is defeated. Hamas leaders reiterated their position on Wednesday that any ceasefire plan must entail a permanent end to the war.

A senior Hamas official indicated that was the movement's reply to Biden — an apparent rebuttal. But senior Hamas official Sami Abu Zuhri told Reuters on Thursday the movement had rejected the Israeli agreement that Biden referred to, not Biden's views or the ideas he made public.

"We welcomed what Biden said about ending the aggression and the Israeli withdrawal but the document which makes the basis of the American draft resolution at the UN Security Council has no mention of ending the aggression or the withdrawal," he said.

Mediators meet in Doha

Washington is still pressing hard to come up with a formula that both sides can agree. CIA director William Burns met senior officials from mediators Qatar and Egypt on Wednesday in Doha to discuss the ceasefire proposal.

Biden has repeatedly declared that ceasefires were close over the past several months, only for no truce to materialise.

Last week's high-profile announcement coincides with intense domestic political pressure on Israeli Prime Minister Benjamin Netanyahu to chart a path to end the eight-month-old war and negotiate the release of Israeli hostages held by Hamas.

Hamas, which rules Gaza, precipitated the war by attacking Israeli territory on Oct 7, killing around 1,200 people and capturing more than 250 hostages, according to Israeli tallies. Around half of the hostages were freed in the November truce.

Israel's military assault on Gaza has killed more than 36,000 people, according to health officials in the territory, who say thousands more dead are feared buried under the rubble.

About half of Hamas's forces have been wiped out in eight months of fighting and the group is relying on insurgent tactics to frustrate Israel's attempts to take control of Gaza, US and Israeli officials told Reuters.

Hamas has been reduced to 9,000 to 12,000 fighters, according to three senior US officials familiar with battlefield developments, down from American estimates of 20,000-25,000 before the conflict. Israel says it has lost almost 300 troops in the Gaza campaign.

Hamas does not disclose fatalities among its fighters and some officials have described Israel's figures for the number of Hamas fighters killed as exaggerated.

Meanwhile, a conflict between Israel and the Lebanon-based Hezbollah is threatening to escalate, with the US State Department warning against a full-blown war.

Although Biden described the ceasefire proposal as an Israeli offer, Israel's government has been lukewarm in public. A top Netanyahu aide confirmed on Sunday that Israel had made the proposal even though it was "not a good deal".

Far-right members of Netanyahu's government have pledged to quit if he agrees to a peace deal that leaves Hamas in place, a move that could force a new election and end the political career of Israel's longest-serving leader.

Centrist opponents who joined Netanyahu's war cabinet in a show of unity at the outset of the conflict have also threatened to quit, saying his government has no plan.