GAZA CITY, Gaza -- Israeli mortar shells exploded Tuesday near a U.N. school in Gaza that was sheltering hundreds of people displaced by Israel's military action against Hamas militants, killing at least 30 Palestinians.

Israel's military said its shelling -- the deadliest single episode since Israeli ground forces invaded Gaza on Saturday -- was a response to mortar fire from within the school and said Hamas militants were using civilians as cover.

Two residents of the area who spoke by telephone said they saw a small group of militants firing mortar rounds from a street near the school, where 350 people had gathered to get away from the shelling. They spoke on condition of anonymity for fear of reprisal.

U.N. officials asked for an investigation of the shelling. The aftermath, which included 55 wounded, added to the civilian toll and added to international pressure for Israel to end the offensive against Hamas.

President-elect Barack Obama broke his silence on the crisis Tuesday saying, "the loss of civilian life in Gaza and in Israel is a source of deep concern for me." He declined to go further, reiterating his stance that the U.S. has only one president at a time.

At the U.N. in New York, Secretary-General Ban Ki-moon called the Israeli bombardment of the group's facilities in Gaza "totally unacceptable." Israel's shells have fallen around three schools, including the girls school hit Tuesday and a health center for Palestinian refugees.

Some 15,000 Palestinians have packed the U.N.'s 23 Gaza schools because their homes were destroyed or to flee the violence. The U.N. provided the Israeli military with GPS coordinates for all of them.

Secretary of State Condoleezza Rice met Tuesday with Palestinian President Mahmoud Abbas to lobby for a U.S.-backed cease-fire plan for Gaza. Arab nations were floating a revised U.N. resolution calling for an immediate end to all military action and deployment of an international observer force to monitor a cease-fire and protect Palestinian civilians in Gaza.

In the wake of the criticism, Israel agreed to set up a "humanitarian corridor" to ship vital supplies to the Gaza Strip, an idea that had been floated by the U.N. Security Council. Under the plan, Israel will suspend attacks in certain areas to allow people to get supplies.

The three mortar shells that crashed down on the perimeter of the U.N. school struck at mid-afternoon, when many people in the densely populated camp were outside getting some fresh air, thinking an area around a school was safe.

Images recorded by a cameraman from AP Television News showed crowds fleeing the scene, pavements smeared with blood and battered bodies of the dead being carried off by medics and horrified bystanders. A youth who limped away from the scene was helped along by several others. Sandals were scattered on the pavement by a pock-marked wall.

World powers that tried but failed to get a truce in place before Israel sent in its ground forces warned of the potential for higher civilian casualties if the fighting moved onto Gaza's streets, and Gaza's main hospital has been overwhelmed with wounded innocents. Mortar fire, in particular, is far less accurate than the laser-guided bombs Israel has used throughout the campaign.

The U.N. agency that runs the school along with other programs for Palestinian refugees said two other U.N. schools in Gaza were struck by Israeli fire since Monday night. In the first incident, an airstrike on the Asma Elementary School in Gaza City killed three men who were among more than 400 people taking refuge in the building. In the other, an artillery shell landed inside an empty boys school in Jebaliya.

"There's nowhere safe in Gaza. Everyone here is terrorized and traumatized," said John Ging, head of Gaza operations for the United Nations Relief and Works Agency.

The episode is certain to add to the urgency of truce efforts by leaders from Europe and the Middle East.

"I sincerely hope that for the sake of those who have died that it will not have been in vain, that it will spur everybody into more immediate action to get this cease-fire agreed and just stop horrific violence," Ging said.

An Israeli military statement said it received intelligence that the dead at the girls school included Hamas operatives, among them members of a rocket launching cell. It identified two of them as Imad Abu Askar and Hassan Abu Askar.

Two residents who spoke to an AP reporter by phone said the two brothers were known to be low-level Hamas militants. They said a group of militants -- one of them said four -- were firing mortar shells from near the school.

An Israeli shell targeted the men, but missed and they fled, the witnesses said, refusing to allow their names to be published because they feared for their safety. Then another three shells landed nearby, exploding among civilians, they said.

Palestinian militants have frequently fired from residential areas in the past.

Ging said the U.N. agency's staff work to prevent militants from entering the schools it has opened to shelter those at risk.

"Unfortunately tonight's incident is just another example of how Hamas operates," said Israeli government spokesman Mark Regev. "This is not the first time they have exploited a U.N. facility. This is not the first time that they have deliberately used innocent civilians as human shields."

A total of 71 Palestinians were killed Tuesday -- with just two confirmed as militants, health officials in Gaza said.

Dr. Bassam Abu Warda, director of Kamal Adwan Hospital, said 36 people were killed, while the United Nations confirmed 30 deaths.

Israeli TV news broadcasts gave most of their attention to continued rocket fire on southern Israel. One of the two dozen rockets fired from Gaza on Tuesday wounded an Israeli infant.

There seemed to be little preoccupation in Israel with the deadly scene at the school.

In the past, however, Israeli ground offensives have been cut short when an errant shell or missile hit a civilian center, killing and wounding women and children, leading to an international outcry that forced Israel to stand down.

In 1996, an invasion of southern Lebanon to quell militant rocket fire at northern Israel was aborted after an artillery shell hit a camp of villagers next to a U.N. post, killing about 100 people.

In November 2006, Israeli forces withdrew from northern Gaza after a shell hit a house, killing 18 members of a family, including eight children, setting off a world outcry. Rocket fire at Israel resumed immediately.

Seven Israeli soldiers have been killed since the ground operation began, including four killed Monday in a two separate friendly fire incidents. Higher tolls among soldiers could also sap support for the offensive.

Despite international criticism over civilian deaths and calls for a cease-fire, Israeli tanks rumbled closer to the towns of Khan Younis and Dir el Balah in south and central Gaza but were still several miles outside, witnesses said. Israel already has encircled Gaza City, the area's biggest city.

Venezuela's government expelled the Israeli ambassador and embassy personnel because of the assault as a high-level European Union delegation met with President Shimon Peres Tuesday in a futile bid to end the violence. Commissioner Benita Ferraro-Waldner acknowledged Israel's right to self-defense, but said its response was disproportionate.

"We have come to Israel in order to advance the initiative for a humanitarian cease-fire and I will tell you, Mr. President, that you have a serious problem with international advocacy, and that Israel's image is being destroyed," she said, according to a statement from Peres' office.

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Barzak reported from Gaza City, Keyser from Jerusalem.