Israel killed at least 40 displaced Palestinians Thursday when it targeted a school housing thousands of displaced Gazans at the Nuseirat refugee camp, local authorities said.

In a statement, the Gaza-based government Media Office said the Israeli army struck a U.N. agency for Palestinian refugees (UNRWA) school in the Nuseirat refugee camp also leaving dozens of people injured.

It added that the Israeli army's relentless "massacres" in Gaza is proof that it continues the "genocide" of displaced Palestinians in the Gaza Strip.

Authorities at Al-Aqsa Martyrs Hospital said that the attack left at least 40 people dead and dozens of others injured. They said the death toll may rise as victims are still being brought to the hospital.

The Israeli army, for its part, admitted hitting the UNRWA school in the Nuseirat refugee camp, claiming Hamas fighters were hiding inside.

Sensitive timing

The strike took place at a sensitive moment in mediated negotiations on a cease-fire agreement entailing the release of hostages seized by Hamas on Oct. 7 and some of the Palestinians held in Israeli jails. Hamas seeks a permanent end to the war. Israel says it must destroy the resistance group first.

The United States issued a joint statement with other countries Thursday calling on Israel and Hamas to make whatever compromises were necessary to finalize a deal as the two sides gave contradictory accounts of the school attack.

Ismail al-Thawabta, the director of the government media office, rejected Israel's assertion that the U.N. 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 its fighter jets had carried out a "precise strike" and circulated 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 members of deliberately using U.N. facilities as operational bases.

He alleged 20-30 members 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 U.N. 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. Local media had earlier put the toll at 35-40. Thawabta and a medical source said 40 had been killed, including 14 children and nine women.

Cease-fire efforts

Israel announced a new military campaign in central Gaza on Wednesday. It says there will be no halt to fighting during cease-fire talks, which have intensified since U.S. President Joe Biden outlined a proposal on Friday.

Since a weeklong truce in November, all attempts to arrange a cease-fire have failed, with each side blaming the other.

"At this decisive moment, we call on the leaders of Israel as well as Hamas to make whatever final compromises are necessary to close this deal," said the statement issued by the White House jointly with Argentina, Austria, Brazil, Britain, Canada and others.

CIA Director William Burns met senior officials from mediators Qatar and Egypt on Wednesday in Doha to discuss the cease-fire proposal. Two Egyptian security sources said talks continued Thursday but had shown no sign of breakthrough.

Biden has repeatedly declared that cease-fires were close over the past several months, only for no truce to materialize.

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 captives held by Hamas.

The conflict was triggered by the Oct. 7 Hamas incursion, which resulted in the death of more than 1,170 people in Israel, according to an AFP tally based on official Israeli figures.

Out of 252 people taken hostage that day, 128 are still being held inside the Gaza Strip, including at least 37 who the army says are dead.

Israel has killed over 36,600 Palestinians, mostly women and children, in the Gaza Strip since, according to the Gazan Health Ministry

About half of Hamas' forces have been wiped out in eight months of fighting, U.S. and Israeli officials told Reuters.

Hamas has been reduced to 9,000 to 12,000 fighters, according to three senior U.S. 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.

Meanwhile, Israel on Thursday mounted attack on southern Lebanon, where Hezbollah is based, with the U.S. State Department warning against a full-blown war.

Although Biden described the cease-fire proposal as an Israeli offer, Israel's government has been lukewarm in public. A top Netanyahu aide confirmed 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.