Israel targeted a Gaza school on Thursday that it said contained a Hamas compound, killing fighters involved in the October 7 attack that sparked the eight-month war, but Gaza media said the strike killed at least 40 people seeking shelter, with 73 wounded.
The Israeli military said it assessed that there were 20-30 Hamas fighters located in the United Nations Palestinian Refugee Agency school in Nuseirat, central Gaza, but Ismail Al-Thawabta, the director of the government media office, rejected the claims.
"The occupation uses lying to the public opinion through false fabricated stories to justify the brutal crime it conducted against dozens of displaced people," Thawabta told Reuters.
Israel's military said that before the strike by Israeli fighter jets, the military took steps to reduce the risk of harm to civilians.
Israel has said there will be no halt to fighting during ceasefire talks.
In an apparent blow to a truce proposal touted last week by US President Joe Biden, the leader of Hamas on Wednesday said the group would demand a permanent end to the war in Gaza and Israeli withdrawal as part of a ceasefire plan.
The remarks by Hamas leader Ismail Haniyeh appeared to deliver the group's reply to the proposal that Biden unveiled last week. Washington had said it was waiting to hear an answer from Hamas to what Biden described as an Israeli initiative.
"The movement and factions of the resistance will deal seriously and positively with any agreement that is based on a comprehensive ending of the aggression and the complete withdrawal and prisoners swap,” Haniyeh said.
Asked whether Haniyeh's remarks amounted to the group's reply to Biden, a senior Hamas official replied to a text message from Reuters with a "thumbs up" emoji.
Washington is still pressing hard to reach an agreement. CIA director William Burns met senior officials from mediators Qatar and Egypt on Wednesday in Doha to discuss the ceasefire proposal.
Since a brief week-long truce in November, all attempts to arrange a ceasefire have failed, with Hamas insisting on its demand for a permanent end to the conflict, while Israel says it is prepared to discuss only temporary pauses until Hamas is defeated.
Biden has repeatedly declared that ceasefires were close over the past several months, only for no truce to materialise.
Last week's announcement came with far greater fanfare from the White House, and at a time when Israeli Prime Minister Benjamin Netanyahu is under mounting domestic political pressure to chart a path to end the eight-month-old war and negotiate the release of Israeli hostages held by Hamas.