More than 60 Palestinians were killed Sunday as Israeli forces pounded northern Gaza, sending thousands more fleeing in terror in the deadliest assault on the enclave in five years.

Sunday's bloody toll prompted urgent efforts by the International Committee of the Red Cross to broker a temporary ceasefire to allow paramedics to evacuate the dead and wounded in a deal accepted by both sides.

Inside the ravaged neighbourhood of Shejaiya, there were hellish scenes of carnage and chaos as a convoy of ambulances rushed in to make the most of the calm, an AFP correspondent said.

But it lasted less than an hour, with Israel accusing Hamas militants of firing in violation of the agreement, and saying its forces were "responding accordingly."

As the death toll in Gaza passed 410, UN chief Ban Ki-moon headed to the region to add his weight to truce efforts and Palestinian president Mahmud Abbas was to hold talks in Qatar with Hamas chief Khaled Meshaal.

So far, truce efforts have been rejected by the Islamist Hamas movement, which is the dominant power in Gaza.

Undaunted by the Israeli bombardment by land, sea and air, it has pressed on with its own assaults which killed another two Israeli soldiers overnight, the army said.

Shejaiya burns

As Israel's blistering offensive on Shejaiya showed no sign of easing, thousands could be seen fleeing for their lives after heavy shelling left casualties lying in the streets, an AFP correspondent reported.

Footage from the area showed vast clouds of black smoke billowing into the sky as the shelling continued and Gaza's eastern flank burned.

Ambulances were unable to reach much of the area along the border with Israel because of heavy fire.

But as the ceasefire got under way, a convoy of ambulances entered, with medics seen picking up at least three dead bodies, including that of a man with his intestines hanging out and his head completely destroyed, the correspondent said.

The blackened shells of cars littered the streets along with the burnt-out wreckage of an ambulance, as smoke poured from areas that were still burning.

At least four men carrying machine-guns could be seen among the people evacuating the area, some of them masked, the correspondent said.

Among the dead were women and children, as well as a Palestinian paramedic and a cameraman who were killed when the ambulance they were in was hit, with the ongoing fire hampering efforts to recover the bodies.

"He wasn't a fighter, he was a fighter for humanity," wailed one relative as the family buried him.

"He was an ambulance worker, did he deserve to die?"

Agony at hospital

At Gaza City's Shifa hospital, casualties were being brought in by the minute, some in ambulances, others in cars and trucks.

Among them were many children screaming in agony, some peppered with shrapnel wounds.

"This is the worst I've ever seen it," said Doctor Said Hassan, who has worked at the hospital for eight years.

Fights broke out in the emergency room as hysterical parents banged on the walls in fear and sorrow.

"The shelling was non-stop, it was everywhere," Sabah Mamluk, 40, told AFP.

"We ran into the streets and started to walk. It was terrifying," she said.

Meanwhile, the Israeli army confirmed a total of four soldiers had been killed on Saturday, among them two who died in a militant raid inside Israel, another who was killed by an anti-tank missile while the fourth died in a firefight.

An Israeli Bedouin man was also killed on Saturday, raising the Israeli death toll to seven - five soldiers and two civilians.

Israel said its ground operation to destroy the network of tunnels used by militants to stage cross-border attacks was to "expand" later Sunday.

"This evening, the ground phase of Operation Protective Edge expands, as additional forces join the effort to combat terror in the Gaza Strip and establish a reality in which Israeli residents can live in safety and security," the army said.

Displaced triple

Israeli Prime Minister Benjamin Netanyahu has put the blame for civilian casualties squarely on Hamas, accusing the group of "using innocent civilians as human shields."

Earlier this week, the UN agency for Palestinian refugees, UNRWA, expressed outrage after finding 20 rockets stored in one of its empty schools in Gaza.

So far, UNRWA has opened 55 of its schools to shelter those fleeing the most heavily bombarded areas, with more than 63,000 people taking refuge in them, the agency said.

Meanwhile, Hamas confirmed Meshaal had received an invitation for talks in Cairo on an Egyptian peace initiative.

A similar proposal earlier this week was accepted by Israel but snubbed by Hamas.