France and Egypt announced a new ceasefire proposal late Tuesday aimed at ending the latest conflict in the Gaza Strip, after Israeli forces attacked an area near a United Nations school where hundreds had sought shelter.

Israel said it was responding to mortar fire, and residents told The Associated Press they had seen Hamas militants operating in the area. But the attack left at least 30 Palestinians dead, including children.

The French and Egyptian presidents said their proposal called for an immediate truce, and for Israel to allow for more humanitarian aid into Gaza, but revealed few specific details.

Late Tuesday, Israeli officials were reviewing the proposal.

The U.S. appeared to back the deal, so long as it called for Hamas to stop its rocket attacks. President-elect Barack Obama also spoke for the first time about the conflict, saying that "the loss of civilian life in Gaza and in Israel is a source of deep concern for me."

Israel has already said it will create a "humanitarian corridor" into the Gaza Strip so that food, medication and other important supplies can be sent into the embattled area.

According to the office of Prime Minister Ehud Olmert, the idea to create the humanitarian corridor came from the UN Security Council and will see Israel halt attacks in limited areas to ensure the supplies get through.

Olmert's office said the corridor will be created to "prevent a humanitarian crisis in the Gaza Strip."

Tuesday's attack near the UN school was the second such attack in just a few hours. In both cases, the schools were being used to shelter displaced Palestinians.

"There's nowhere safe in Gaza. Everyone here is terrorized and traumatized," John Ging, the top UN official in Gaza, said after the first strike.

The Israeli military confirmed the attack, and said an early investigation into the incident suggested soldiers had been responding to mortar fire coming from the area. In a statement, it also accused Hamas of "cynically" using civilians as human shields.

Local residents confirmed that at least two militants had staged attacks from the area, according to The Associated Press. They spoke on condition of anonymity.

Israel began its push to halt Hamas rocket fire on Dec. 27, launching an aerial assault on militant targets in the city.

Since then, Israeli ground forces have moved into the territory and surrounded the city, and Israeli naval ships have also loaned firepower to the assault, which was moving closer and closer to major population centres.

Increasing numbers of casualties

On Tuesday, 58 Palestinians were killed in fighting. Only two of them were confirmed to be militants, according to Gaza health officials.

In total, close to 600 Palestinians -- many of them civilians -- have now been killed in the conflict, which has triggered a full-blown humanitarian crisis, with thousands of Palestinians now on the brink of starvation, according to the UN.

The International Committee of the Red Cross said Tuesday that the situation is becoming desperate, CTV's Tom Kennedy reported from Jerusalem.

"There's something like 750,000 people in Gaza that depend on food aid that's not getting through," Kennedy told CTV Newsnet.

"They face imminent starvation. According to the UN, a quarter of a million people don't have access to drinking water, more than a million people don't have electricity, so it is very, very bad."

Plumes of smoke were clearly visible over the city from the Israeli side of the border Tuesday morning, as tanks rumbled towards the towns of Khan Younis and Dir el Balah in south and central Gaza.

Along with French and Egyptian officials, former British prime minister Tony Blair was in Israel Tuesday, also working to broker a peace deal between the two sides.

Israel maintains it respected an earlier ceasefire, but the agreement was never followed by Hamas -- and it is not eager to strike another deal unless rocket fire is guaranteed to stop.

"One of the key objectives of the Israeli military offensive is to cripple Hamas and stop those rocket attacks on communities, particularly in southern Israel," Kennedy said Tuesday morning.

"That hasn't happened yet. We're also hearing reports that as of about half an hour ago, Hamas had fired about 20 rockets into Israel, so this is really a desperate humanitarian and military situation."

Israel has denied Hamas claims that militants killed 10 Israeli soldiers. Three Israeli soldiers were killed Tuesday by fire from one of their own tanks. A fourth was killed in fighting in the northern Gaza Strip.

Foreign reporters have been banned from entering Gaza.

With files from The Associated Press