Israel has announced it will be holding its fire in parts of Gaza for seven hours on Monday, amid world outrage over a deadly strike on a UN school entrance in the Palestinian territory.

The limited and unilateral truce came after world powers fiercely condemned the attack that left 10 Palestinians sheltering at a school dead, as Israel was pulling some of its troops from Gaza.

The truce will only apply to parts of the Gaza Strip where there is currently no military activity.

The announcement was received with distrust by the Palestinian group Hamas, whose spokesman in Gaza, Sami Abu Zuhri, warned the local population to be wary.

"Israel’s so-called humanitarian ceasefire is unilateral and it comes in a time when the Zionist enemy wants to distract the world from the massacres they have committed against our people in Gaza," Abu Zuhri told Hamas's Al Aqsa television station.

"We don’t trust their intentions and we ask our people to take extreme caution."

The Israeli army said the seven-hour "humanitarian window" would take place between 0700-1400 GMT in all of the Gaza Strip except the area east of the southern city of Rafah, "where clashes were still ongoing and there was Israeli military presence".

The army warned in a statement that it would "respond to any attempt to exploit this window" and attack civilians and soldiers during the truce.

It also said that residents of Abasan al Kabira and Abasan al Saghira, two villages east of Khan Younis in southern Gaza, could return home.

Al Jazeera's Nicole Johnston, reporting from Gaza, said temporary ceasefires imposed since Israel's offensive began had not been successful, even when sponsored by the UN.

"Israel has made it clear areas where the army is continuing its operations will be exempt, and that includes areas of Rafah. We know that in certain places like Beit Lahiya, Israel has come out and told people they can go home but people have been too frightened to do so," Johnston said.

The Israeli army said that it had on Sunday targeted three Islamic Jihad fighters on a motorbike "in vicinity of an UNRWA school in Rafah".

Ban Ki-moon, UN secretary-general, called the attack near the school sheltering some 3,000 Palestinians who had fled their homes due to the fighting "a moral outrage and a criminal act".

"This madness must stop," he said.

US 'appalled'

Jen Psaki, the State Department spokesperson, said the US was "appalled" by the attack and called for a "full and prompt" investigation.

"Israel must do more to meet its own standards and avoid civilian casualties," she said.

French President Francois Hollande said the bombing near the school was "unacceptable", backing calls by Ban "to ask that those responsible for this violation of international law answer for their actions", without saying who he considered responsible.

In a statement early on Monday, Benjamin Netanyahu, Israeli prime minister, said "Israel does not aim its fire at civilians and is sorry for any attack that unintentionally hits civilians", without directly addressing the Rafah attack.

Israeli attacks on Gaza continued on Monday and killed 11 people raising the death toll since the July 8 beginning of the confrontation to over 1,820 according to Palestinian medical sources.

An Israeli air raid killed an Islamic Jihad commander in the Gaza Strip just hours before Monday's partial truce went into effect.

The Islamic Jihad group - a close ally of Hamas - said Daniel Mansour, its commander in the northern part of Gaza, died when an Israeli strike hit his home just before dawn.