Local hospitals said the school in Nuseirat was sheltering people displaced by the war when it was hit on Sunday night.

Israel has not commented but regularly accuses Hamas operatives of concealing themselves in school buildings - claims the group denies.

Middle East - latest updates

Meanwhile, Israel's military has named four soldiers killed in Sunday's drone attack on a military base in the town of Binyamina.

It reportedly hit the canteen when it was full for dinner and the ambulance service said 61 people were injured.

The Israel Defence Forces said the soldiers killed were all 19 years old.

It named them as Sergeant Omri Tamari, Sergeant Yosef Hieb, Sergeant Yoav Agmon and Sergeant Alon Amitay.

Hezbollah - designated a terror group by countries including the US and UK - said it was retaliation for an Israeli attack that killed 22 people in the Lebanese capital Beirut on Thursday.

It claimed Sunday's attack was engineered to avoid air defences and involved "squadrons" of drones.

The attack came on the same day the US said it would send a new air defence system to Israel - as well as the troops to operate it.

Israel is trying to critically weaken Hezbollah so tens of thousands of its citizens under threat from rocket attacks can return to homes near the border.

Its offensive has killed a number of key commanders, including the group's leader, but many civilians have died and lost their homes since the airstrikes and limited ground invasion began.

There is also an ongoing row over UN peacekeepers in Lebanon after five were wounded in recent days by Israeli attacks that hit their positions.

The UN said there was a "further flagrant violation of international law" on Sunday when Israeli tanks forcibly entered the gates of one position, destroyed the main gate and fired smoke rounds.

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Israel's military said a tank trying to evacuate wounded soldiers had backed into a UN post while under fire and a smoke screen was used to provide cover.

It said it tries to maintain constant contact with the UN peacekeeping force in the region, known as UNIFIL.

In a video on Sunday, Israeli Prime Minister Benjamin Netanyahu said he regretted the incidents but accused peacekeepers of "providing a human shield" for Hezbollah and urged them to evacuate.

On Monday, Spain's leader, Pedro Sanchez, urged EU members to suspend a free-trade deal with Israel over its actions in Gaza and Lebanon.

Spain and Ireland have been in talks with other nations over reviewing the agreement on the basis Israel might be breaching the human rights clause.

Meanwhile, Israel is still to retaliate against Iran for its missile attack earlier this month.

Fears persist that it could target the country's oil facilities and further inflame the already critical situation in the region.