BBC
Israel's military has carried out 50 air strikes in Gaza overnight as its cabinet prepares to vote on a proposal for a unilateral ceasefire.
Palestinians say a tank shell hit a UN school in northern Gaza, killing at least two people sheltering there. Israel says it is checking the report.
The head of the UN Relief and Works Agency (Unrwa) said he was "ashamed" civilians were not being protected.
Hamas said it would ignore any truce if its conditions were not met.
A spokesman for the militant group, Osama Abu Hemdan, told AFP news agency: "As long as it [the Israeli military] remains in Gaza, resistance and confrontation will continue."
Egypt has been mediating between Israel and Hamas in a bid to secure a truce.
Ahead of the Israeli cabinet meeting, Egyptian President Hosni Mubarak called for an immediate and unconditional ceasefire in Gaza and the withdrawal of Israeli troops.
'Investigation'
Israeli warplanes renewed bombing raids on Gaza just before dawn on Saturday, with heavy explosions south of Gaza City.
United Nations officials say two children, aged five and seven, were killed when Israeli tank fire hit a UN school where hundreds had taken shelter in the northern town of Beit Lahiya.
John Ging, the Unrwa chief in Gaza, told the BBC that there was "nowhere safe in Gaza".
"I'm ashamed of this - there's international legal responsibility to protect civilians in conflict, and we're not doing it," Mr Ging said.
"We're failing here, we're failing and there has to be accountability for that failure."
Mr Ging's spokesman earlier said an investigation ought to be held to ascertain whether any war crimes had been committed in the incident.
An Israeli foreign ministry spokesman, Yigal Palmor, told the BBC that Israel was waiting for more information on what happened.
"We don't have an exact description of exactly when, where or what was fired and where the shells had struck," he said. Accurate details would be established once the fighting ended, he added.
This is not the first time the UN has talked about war crimes in Gaza.
Earlier this month, UN High Commissioner for Human Rights Navi Pillay said some Israeli actions reported in Gaza might warrant prosecutions for war crimes.
Rocket attacks
Israel's security cabinet will vote on Saturday evening on whether to declare a ceasefire, after its government said it thought "significant progress" had been made at talks with Egyptian mediators in Cairo.
Under the Egyptian proposal, fighting would stop immediately for 10 days and Israeli forces would remain in Gaza while the border crossings into the territory would remain closed.
For its part, Egypt would, with international help, try to shut down weapons smuggling routes on its boundary with Gaza and discussions on opening the crossings would take place at a later date.
Hamas insists any ceasefire must involve Israeli troops withdrawing from Gaza and an immediate lifting of the Israeli blockade. Hamas officials are expected to attend further talks on Saturday in Cairo.
On Friday Palestinian militants in Gaza reportedly fired more than 15 rockets at southern Israel, leaving five Israelis wounded.
Israel's main objective in Operation Cast Lead is to end Gaza militants' ability to fire rockets at Israel and stop them smuggling through tunnels from Egypt.
US-Israel deal
On Friday, Israel and the US signed a deal in Washington that calls for expanded intelligence co-operation between their two countries to prevent Hamas smuggling arms into Gaza if a ceasefire is implemented.
Under the agreement, the US will provide detection and surveillance equipment, as well as logistical help and training to Israel, Egypt and other nations for monitoring Gaza's land and sea boundaries.
In the US capital, Israeli Foreign Minister Tzipi Livni said Israel would have to suspend any ceasefire if Hamas continued to fire rockets.
The Palestinian health ministry in Gaza has told the BBC that 1,193 people have been killed, including 410 children and 108 women since the conflict began on 27 December.
There were 5,300 people wounded, including 1,600 children, the ministry said.
Thirteen Israelis, mostly soldiers, have been killed during the campaign.
On Friday night, the UN General Assembly in New York overwhelmingly passed a resolution calling for an immediate and durable ceasefire in Gaza, leading to a full withdrawal of Israeli troops.
The BBC's Christian Fraser in southern Gaza says the situation for Palestinian families there is tough, with food and electricity supplies limited and no running water.
He says in the skies above can be heard the scream of F-16 jets circling for their next targets.
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