The family of four Palestinian children killed when Israel bombed a beach during last summer's Gaza war were indignant this week after the closure of a probe into the incident.

The Israeli army, which launched the investigation after the 50-day July-August war ended, announced late on Thursday that the "tragic" attack witnessed by several foreign journalists had not violated international law, and said it was closing the case.

It was one of the most widely covered and controversial incidents of the war, taking place in full view of international media, with a handful sitting outdoors very close to the beach at the time of the attack.

"Israel behaves as if it's a country above international law," Zakariya Bakr, the uncle of the children who died, told AFP.

"It's not unusual for the occupation (Israel), which shells houses with their occupants inside them, and kills children, to declare its soldiers innocent.

"We urge the international community to act seriously to stop this farce," he said, referring to several army investigations into alleged misconduct during the conflict between Israel and Palestinian Islamist movement Hamas.

On 16 July, cousins Ahed Atef Bakr and Zakaria Ahed Bakr, both aged 10, nine-year-old Mohamed Ramez Bakr and 11-year-old Ismail Mohamed Bakr were playing on the beach in Gaza City when they were hit in two separate airstrikes.

The incident is among those likely to be presented by the Palestinians to the International Criminal Court as evidence of alleged Israeli war crimes.

But the army said in its report that it had decided to "close the investigation file, in the absence of a suspicion regarding the commission of a criminal offence by IDF (Israel Defence Forces) soldiers".

The report said the army had targeted an area of the beach that had been used exclusively by Hamas and separated from civilians.

It also said the "attack was aimed at figures who were understood to be militants from Hamas's naval forces," and that they were "not identified, at any point during the incident, as children.

"Under the circumstances... it would not have been possible for the operational entities involved to have identified these figures, via aerial surveillance, as children," it added.

'Clear they were children'

Western journalists who witnessed the incident and its aftermath, and spoke on condition of anonymity, said the children had been playing on that area of the beach, which was not clearly separated from civilians.

"It was absolutely crystal clear... from the figures running, that they were children," one journalist said.

"They were all very, very small, I thought they were much younger than they were."

At an Israeli army briefing where probes into Gaza were announced, he said, the army showcased their surveillance capability to distinguish civilians from militants.

"There needs to be a question answered, how did they not know they were children?"

The army said it based the investigation on testimony by soldiers and officers, media footage and other documents, but was unable to take direct witness testimony from Gazans because witnesses declined to meet.

One Western journalist said he had volunteered himself to a senior Israeli army official as a witness, but he was never contacted.

More than 2,220 Palestinians, most civilians, were killed in the war, as well as 72 Israelis, who were mostly soldiers.