Photo: A Palestinian man carries an injured child following a strike on a UN school in Rafah, in the southern Gaza Strip, on Sunday. (AFP: Said Khatib)
Related Story: Bombing, rocket attacks reported during Gaza ceasefire
Related Story: Israel vows to continue military campaign in Gaza
Foreign Affairs Minister Julie Bishop has described the shelling of three United Nations schools sheltering civilians in Gaza as "indefensible", saying Australia wants a full investigation.
This afternoon Israel said it would pull all of its ground forces out of Gaza before the beginning of a 72-hour ceasefire, which began at 3:00pm AEST.
Today Ms Bishop welcomed the ceasefire but said Australia had noted the unfolding situation in Gaza with "deep concern".
Gaza officials say the war has killed 1,834 Palestinians, most of them civilians.
Video: Child killed, dozens wounded in Israeli airstrike (ABC News)
Israel says 64 of its soldiers and three civilians have been killed since fighting began on July 8 after a surge in cross-border rocket salvos from Gaza.
There has been growing international outrage over attacks on UN schools during the fighting
On the ground: Hayden Cooper
On Gaza radio Palestinian deaths are often marked by patriotic music.
And so it was just after the start of an apparent ceasefire overnight when the news rang out - an Israeli airstrike in a refugee camp close by.
On arrival we find thousands of people in the street. They lead us into a neighbouring building and up five flights of stairs until we have a rooftop view of the devastation below.
A house has been crushed and with it the people who live there.
We are looking at utter chaos here as thousands of people crawl all over the wreckage of this place which has just been hit by an Israeli airstrike.
They are frantically hitting the wreckage with sledgehammers trying to find bodies underneath.
A lifeless eight-year-old girl is pulled from the rubble and rushed to Shifa Hospital. We find her body later in the morgue next door.
This was supposed to be a day of relative calm here. Instead there are more victims and once again they are children.
"I am deeply troubled by the suffering being endured by the Palestinian population in Gaza, where many hundreds of innocent people have been killed, including women and children," she said in a statement.
"There have been a number of shocking incidents, including the indefensible shelling of three UN schools, all of which were sheltering civilians."
She said Israel, in exercising its right to self-defence, must take all necessary steps to prevent civilian casualties.
"No country should have to tolerate arbitrary and indiscriminate attacks upon its civilian population by rocket fire and infiltration through tunnels," she said.
"Both sides must respect international humanitarian law."
In the most recent attack on a school, 10 people were killed on Sunday in what Gaza officials said was an Israeli air strike.
Israel said it was investigating the incident and that it may have been linked to an attempt by the military to kill Islamic Jihad gunmen as they drove nearby.
The UN described the attack as a "moral outrage and a criminal act" as well as a "gross violation of international humanitarian law", and called for those responsible to be held accountable, while the United States described the attack as "disgraceful".
Truce hammered out during talks in Cairo
Following a seven-hour humanitarian pause in some parts of Gaza overnight, representatives of Hamas and Islamic Jihad met Egyptian officials in Cairo.
No Israeli delegates were present but Egypt presented Benjamin Netanyahu's government with Palestinian conditions for a truce in the four-week conflict.
All parties then announced they had agreed to a 72-hour halt in the fighting.
Israeli radio reported that military sources had declared they had completed their main mission of destroying cross-border tunnels dug by Palestinian guerrillas.
The Palestinians want Israel to withdraw its forces from Gaza, lift its blockade, release prisoners and start reconstruction.
Israel says the rehabilitation of Gaza should be linked to its demilitarisation.
Mr Netanyahu had earlier said the operation in Gaza would continue until there was prolonged quiet and security for Israelis.
Although there was a drop in the level of violence during Monday's ceasefire, Palestinians accused Israel of breaking it by bombing a refugee camp in northern Gaza.
Israel's military spokesman Lieutenant Colonel Peter Lerner said militant rocket fire from Gaza must stop.
"The [Israeli defence force] held its fire to enable a humanitarian recess, a window of opportunity for people to re-supply and seek medical attention, but we began to resume our activities just recently to strike Hamas, to strike their rocket launchers," he said.
"They have launched over 60 rockets at Israel to date despite the fact that we had a ceasefire.
"We've destroyed about a third of their rocket capabilities, they've launched about a third at us, and we expect that they have some few thousand rockets still in their arsenal so they can continue they're aggression against Israel.
"It's a decision they have to make, they have to decide whether they want to continue launching these rockets at our civilians."
In Jerusalem, a Palestinian driving an earthmover ran over an Israeli and tipped over a bus before being shot by a policeman.
Separately, a gunman shot a soldier waiting at a bus stop before fleeing on a motorbike.
Gallery: Conflict flares on Gaza Strip
ABC/wires
