In the West Bank, Palestinian factions declared a "Day of Rage" after a night of clashes over Israel's Gaza offensive, with one Palestinian killed.

Among those killed in an air strike on Gaza on Friday were two women, one of them pregnant, adding to a spiralling toll of Palestinian civilian casualties from Israel's military operation, now in its 18th day, aimed at halting militant rocket fire.

An incident on Thursday, in which Israeli shelling of a UN facility sheltering displaced Gazans killed at least 15 civilians, has drawn widespread international condemnation.

UN chief Ban Ki-Moon said he was "appalled" at the shelling which "underscores the imperative for the killing to stop — and to stop now".

Washington said it was "deeply saddened and concerned about the tragic incident", without explicitly blaming its ally Israel.

Amid intense international pressure on both sides to cease fire, Israel's security cabinet was to meet Friday to discuss a truce proposal passed to Prime Minister Benjamin Netanyahu by US Secretary of State John Kerry, media reported.

It proposes a week-long humanitarian ceasefire that would allow Hamas, the de facto power in Gaza, to save face after having rejected an Egyptian initiative last week that proposed a lasting truce first and negotiations later.

According to Western and Palestinian officials, once a humanitarian lull takes hold, delegations from Israel and Hamas would arrive in Cairo — which has mediated past conflicts between the two — for indirect talks that could lead to a lasting truce.

- 7-day humanitarian truce -

"The way it's going is there will be a humanitarian truce declared for seven days, and then everyone comes to Cairo for the talks," said an official with president Mahmud Abbas's Palestinian Authority in the West Bank.

Kerry on Thursday reached out to Hamas allies Turkey and Qatar and was joined in Cairo by UN chief Ban and British Foreign Secretary Philip Hammond to push forward the plan, diplomats said.

Hamas's exiled leader Khaled Meshaal, however, told the BBC in an interview Thursday that any truce must include a guaranteed end to Israel's eight-year blockade of Gaza.

In Gaza, an Israeli air strike on Khan Yunis killed Salah Hasanein, a local leader for Islamic Jihad, and his nephew, security sources said.

Attacks on a house in the southern Gaza town of Deir el-Balah killed a woman of 26 and another aged 23 who was pregnant, Palestinian emergency services spokesman Ashraf al-Qudra said.

Two other people wounded earlier in shelling of Khan Yunis died of their wounds, Qudra said, bringing the number of Gazans killed in the Israeli campaign to 807.

Thursday's strike hit a UN school sheltering some of the 100,000 Palestinians driven from their homes after weeks of deadly fighting between Israeli troops and Hamas militants.

The shell hit a courtyard where people were camped, killing least 15 people and wounding more than 200.

"We want a ceasefire as soon as possible, that's parallel with the lifting of the siege of Gaza," he said.

The latest truce efforts came on the last Friday of Ramadan, as Israeli braced for West Bank and east Jerusalem unrest after Palestinian factions declared a "Day of Rage" in the West Bank and Israeli police restricted entry to the Al Aqsa compound to men aged 50 and above.

One Palestinian was killed and 150 injured in clashes with Israeli forces in the West Bank, Palestinian medics said, with Israeli police arresting 29 in east Jerusalem.