Israeli shells kill 42 at U.N. school: Gaza medics

By Nidal al-Mughrabi

GAZA (Reuters) - Israeli shelling killed more than 40 Palestinians on Tuesday at a U.N. school where civilians had taken shelter, medical officials said, in carnage likely to boost international pressure on Israel to halt a Gaza offensive.

The Israeli army accused Hamas of using civilians as "human shields" and said its troops had fired mortars at the premises after gunmen mortared their positions from inside al-Fakhora school in Jabalya refugee camp.

Citing intelligence reports, it named two men it said were Islamist gunmen killed in the attack. A spokesman said the army did not know how many others died.

People cut down by shrapnel lay in pools of blood in the street. Witnesses said two shells exploded outside the school, killing at least 42 civilians and wounding dozens among people who had taken refuge there and residents of nearby buildings.

Within hours, Egypt, backed by France and other European powers, proposed an immediate ceasefire and talks that could address Israel's demands that Hamas be starved of rockets and other weapons smuggled over the Egyptian border.

Egyptian President Hosni Mubarak and French President Nicolas Sarkozy made the move at a joint news conference. There was no immediate response from Israel or from Hamas.

As bitter combat on the ground went into a fourth day after a week-long aerial bombardment, the bloodshed took Palestinian deaths in 11 days of violence to over 600.

They also prompted U.S. President-elect Barack Obama to break his silence on the offensive, to say the loss of life among civilians was "a source of deep concern" for him.

As momentum gathered behind a European truce plan that could starve Hamas of arms, the outgoing Bush administration said it wanted an "immediate ceasefire."

But it stressed conditions that have characterized the distance between the United States, Israel's close ally, and European and Arab demands for an instant halt to the offensive.

Obama, who takes over from George W. Bush on January 20, said he would not engage in policy until he was in office but vowed to work rapidly thereafter to secure peace in the Middle East.

Some commentators have said the U.S. presidential transition has exposed the United States to greater risks from Israel's action in Gaza. Al Qaeda second-in-command Ayman al-Zawahri called on the Internet for Muslims to "hit the interests of the Zionists and Crusaders wherever and in whichever way you can."

Washington's allies in Arab governments have condemned the Israeli assault, which has contributed to rising oil prices, and the always vocally anti-American Venezuelan President Hugo Chavez, another OPEC member, called it a "Holocaust."

COMBAT

A fourth day of a ground assault, launched after a week of air strikes, still failed to end Hamas rocket salvoes, which again caused damage and some injury in southern Israel.