As Israel's campaign in Gaza entered its 27th day, at least 10 people were killed and 35 wounded when a suspected Israeli missile landed near a United Nations shelter for displaced Gazans.

The UN-run boys school in the town of Rafah had been housing roughly 3,000 civilians.

"We don't have confirmed details yet but the initial report says that there was some kind of airstrike in a street outside one of our shelters," Robert Turner, the operations director for the UN Relief and Works Agency for Palestine Refugees, told the Associated Press.

Among the fatalities were several children and at least one UN worker, according to medics and witnesses.

The Israeli military said it would investigate the incident.

This is the seventh UN school to be hit by aerial fire in four weeks of fighting, which has so far seen the deaths of over 1,700 Palestinians, mostly civilians, and 64 Israeli soldiers and three Israeli civilians.

The Israeli Defense Forces said that each of the prior incidents had been direct responses to Hamas launching rockets from sites in close proximity to the shelters.

At least 30 Palestinians were killed on Sunday as artillery and rocket fire battered other buildings across the Gaza strip, just a day after Israeli Prime Minister Benjamin Netanyahu promised to continue with Israel's military operation, even as the military was completing its main aim of destroying Hamas's elaborate cross-border tunnel network.

On Sunday, an IDF spokesman indicated that Israel was close to achieving its goals.

"We have proceeded with the mission in order to eliminate those (tunnels) that we have found and we expect to complete that within a short period of time, probably within the next 24 hours or so," Lt. Col. Peter Lerner said.

Lerner also confirmed that an Israeli officer who was feared kidnapped and dragged into the tunnels by militants had been killed in the initial line of fire during a Hamas ambush involving gunmen and a suicide bomber on Friday.

The continued fighting on Sunday came during what was supposed to be the final hours of a 72-hour UN and US-brokered truce, which fell apart on Friday shortly after it began.

Inside a Hamas terrorist's home: RPG & anti-tank missile under the bed & attack tunnel entrance under the bathtub — IDF (@IDFSpokesperson)August 3, 2014

Reports in the local media had suggested that Israel was pulling its troops from Gaza.

"The troops are in the midst of a redeployment to other parts of the border," Lerner said. He did not confirm that Israel was withdrawing."Indeed we are releasing troops from the front line but the mission is ongoing. Ground forces are operating. Air forces are operating."

Peace talks between members of the international community including the US, Turkey, Egypt, Qatar, and Palestine resumed over the weekend, but any progress seemed doubtful in the absence of delegates from Israel, which refused to participate after the recent 72-hour truce collapsed.