Update: The original article has been amended to reflect the fact that, as established several days later, the shelling occurred on the outside of the school and so did most casualties.

Israeli mortar fire on Tuesday struck near a U.N.-run school in Gaza killing many, including children, who had taken shelter there, officials said. At least 40 people are counted among the dead, many of them children.

In an airstrike earlier, three Palestinians were killed at another school run by the U.N. Relief and Works Agency.

This occurred on a day of heavy clashes on the outskirts of Gaza City between Israeli troops and Palestinian militants that left dozens of people dead.

The Israeli military said its forces fired on the school in response to mortar fire from within the U.N. premises. “Initial checks ... show that from inside the school mortars were fired at Israeli forces,” a spokesman said. “In response, the forces fired a number of mortar rounds into the area.”

The ongoing Israeli operation against Hamas militants has so far caused 300 casualties and has left 3000 wounded, according to statistics from the International Committee of the Red Cross. The aid organization has appealed to Israel and Hamas fighters to refrain from targeting civilians and civilian infrastructure, which it said is prohibited under international law.

Israel has issued no comment on the school attacks but has said in the past that Hamas knowingly uses schools and mosques as cover for its offensive operations.

U.N. officials as well as the Bush administration and other world leaders, including UK Prime Minister Gordon Brown, have condemned the continued violence and have called for paths which would lead to an eventual ceasefire.

Israel launched its offensive on Dec. 27, saying it sought to halt repeated Palestinian rocket attacks on its southern towns. After a weeklong air campaign, Israeli ground forces invaded Gaza over the weekend. The rising civilian death toll and friendly fire incidents underscore the dangers of combat in the sprawling, densely populated, built-up areas of Gaza.

The worsening death toll has triggered concern amongst international officials over what will likely be a massive humanitarian crisis in the coming weeks. Israeli forces have cut the main Gaza highway in several places, splitting the territory in two along a north-south axis and surrounding Gaza City, which has a population of about 400,000 people.

As of now, Israel says it will not end its operations in Gaza unless it feels the threats posed by Hamas militants have been extinguished.