Gazan authorities said Israeli forces shelled a shelter at a U.N.-run school on Thursday, killing at least 15 people as the Palestinian death toll in the conflict climbed over 760 and attempts at a truce remained elusive.

United Nations Secretary-General Ban Ki-moon expressed his horror at the attack on the school at Beit Hanoun in the northern Gaza strip. "Many have been killed - including women and children, as well as U.N. staff," he said in a statement. "Circumstances are still unclear. I strongly condemn this act."

Ban later arrived to Cairo where he was expected to meet U.S. Secretary of State John Kerry, who has been working the telephones to try to broker an elusive truce.

Kerry's spokesman said the school attack incident "underscores the need to end the violence".

But there was no sign of progress on securing a ceasefire in his four days in the region. "Gaps remain between the parties," a senior U.S. official said, adding that Kerry wouldn't stay "for an indefinite amount of time."

The Israeli military said it was investigating the incident.

Israel Defense Forces (IDF) Lieutenant Colonel Peter Lerner said there was a chance the school had been hit by stray Hamas rockets. "It could be errant fire from the IDF or rockets landing from Gaza terrorists but we still don't know, there's still a question mark," he told Reuters TV.

A spokesman for the U.N. relief agency said it had tried in vain to arrange an evacuation of civilians from the school with the Israeli army, and noted reports of Hamas rockets falling in the area at the same time.

Pools of blood lay on the ground and on students' desks in the courtyard of the school near the apparent impact mark of the shell, according to a Reuters photographer at the scene.

Scores of crying families who had been living in the school ran with their children to a hospital where the victims were being treated a few hundred meters away. Laila Al-Shinbari, a woman who was at the school when it was shelled, told Reuters that families had gathered in the courtyard expecting to be evacuated shortly in a Red Cross convoy.

"All of us sat in one place when suddenly four shells landed on our heads ... Bodies were on the ground, (there was) blood and screams. My son is dead and all my relatives are wounded including my other kids," she wept.

Ashraf al-Qidra, spokesman for the Gaza Health Ministry, said that as well as the 15 dead, 200 people had been wounded in the attack. The director of a local hospital said various medical centers around Beit Hanoun were receiving the wounded.

UNIMAGINABLE PRICE

More than 140,000 Palestinians have fled 17 days of fighting between Israel and Gaza militants, many of them seeking shelter in buildings run by the U.N. Relief and Works Agency (UNRWA). Israeli forces are trying to stop militants from Hamas and their allies from firing rockets into its territory.

"It's clear that civilians are paying an unimaginable price caught between both sides," said UNRWA spokesman Chris Gunness. "We were attempting to arrange a window for evacuation for the civilians with the Israeli army that never came. The consequences were deeply tragic."

Britain called on Gaza's rulers to accept a truce unconditionally. "Hamas must agree to a humanitarian ceasefire without pre-conditions," Foreign Secretary Philip Hammond told a news conference in Cairo as Egypt tries to mediate.

"Then ... the Palestine Authority (and) Israel would come together for discussions to ensure a lasting and sustainable peace in Gaza so that we do not repeat this cycle of violence."

Hamas leader Khaled Meshaal said on Wednesday his fighters had made gains against Israel and voiced support for a humanitarian truce, but only if Israel eased restrictions on Gaza's 1.8 million people.Hamas wants Egypt to open up its border with Gaza too.

The Palestinian death toll in Gaza reached 762 on Thursday, officials said. Israel has lost at least 32 soldiers in clashes inside Gaza and with Hamas raiders who have slipped under the fortified frontier in tunnels.

Palestinian rockets and mortar bombs have also killed three civilians in Israel. Such attacks surged last month as Israel cracked down on Hamas in the occupied West Bank, triggering the July 8 air and sea barrage on the Gaza Strip that escalated into an invasion a week ago.