The latest deadly strikes came on the heels of an escalation in the embattled coastal territory, with Israel and Gaza's Hamas rulers stepping up attacks after more than three weeks of fighting that has killed more than 1,300 Palestinians and more than 50 Israelis.
Gaza health ministry official Ashraf al-Kidra and witnesses said the shopping area was busy because residents, and many who had taken shelter in the area from fighting elsewhere, thought a cease-fire was in place. The Palestinian Red Crescent confirmed the death toll.
The Israeli military had no immediate comment on the strike on the shopping area and said it was investigating the report.
Israel had earlier announced a "humanitarian window" in certain parts of the territory. But it said it would not halt fire in other areas, including in Shijaiyah, where the strike took place. Hamas dismissed the cease-fire, and Gaza militants fired 27 rockets at Israel after it began.
Eyewitnesses said an airstrike hit a warehouse on the edge of Shijaiyah, causing a fire and sending a large cloud of black smoke billowing into the sky. Firefighters and medical vehicles arrived at the scene, according to an Associated Press photographer.
The second airstrike struck an area about 500 meters away, according to witnesses, immediately killing at least 16 people, among them local Palestinian photographer Rami Rayan, who was wearing a press vest at the time.
"People were in the street and in the market, mostly women and kids. Suddenly more than 10 shells landed in the area, the market, in the Turkman area, and next to the gas station," said Salim Qadoum, 26, who witnessed the strike.
"The area now is like a blood bath, everyone is wounded or killed. People lost their limbs and were screaming for help. It's a massacre. I vomited when I saw what happened."
Israeli airstrikes and shelling killed more than 108 Palestinians across the coastal territory throughout the day Wednesday.
The military had declared a four-hour humanitarian cease-fire in parts of Gaza beginning at 3:00 p.m., but Hamas spokesman Sami Abu Zuhri said it lacked any "value" because it excluded border areas from where Hamas wanted to evacuate the wounded.
Gaza militants fired 84 rockets at Israel Wednesday, including more than 26 after the cease-fire was announced, the military said. Al-Kidra, the Gaza health official, said seven Palestinians were killed by an Israeli airstrike in the same period.
The Israeli military said three of its soldiers were killed Wednesday when a house Palestinian militants had rigged with explosives collapsed after they identified an entrance to a tunnel inside. More than a dozen soldiers were wounded in heavy fighting Wednesday, it said.
The latest violence further dimmed hopes of a sustainable truce in the fighting, now in its fourth week.
Israel escalated its campaign on Tuesday, with airstrikes destroying key symbols of Hamas power, including the home of the top Hamas leader. Gaza's only power plant was shut down after shells set its fuel tank on fire.
On Wednesday tank shells hit the U.N. school in the Jebaliya refugee camp before dawn, said Adnan Abu Hasna, a spokesman for the U.N. Relief and Works Agency, which is sheltering more than 200,000 people displaced by the fighting at dozens of U.N. schools across the strip.
Assad Sabah said he and his five children were huddling under desks in one of the classrooms because of the constant sound of tank fire throughout the night.
"We were scared to death," he said. "After 4:30 a.m., tanks started firing more. Three explosions shook the school."
"One classroom collapsed over the head of the people who were inside," he said.
In one classroom, the front wall was blown out, leaving debris and bloodied clothing. Another strike tore a large round hole in the ceiling of a second-floor classroom.
The Israeli military said it fired back after its soldiers were targeted by mortar rounds launched from the vicinity of the school.
The mortars were fired from a distance of some 200 meters (yards) from the school, said an Israeli military official, speaking on condition of anonymity because he was not authorized to talk to the media.
About two hours after the strike, hundreds of people still crowded the school courtyard, some dazed, others wailing.
"Where will we go?" asked Aishe Abu Darabeh, 56. "Where will we go next? We fled and they (the Israelis) are following us."
Al-Kidra, the Gaza health official, said at least 15 people were killed and about 90 wounded in the school strike. Four of the dead were killed just outside the school compound, two in their home nearby and two in the street, after returning from pre-dawn prayers, their relatives said.
In all, 108 Palestinians were killed by airstrikes and tank shelling in different areas of Gaza on Wednesday, al-Kidra said. The total number of Palestinians killed since the July 8 start of fighting rose to 1,347, he said. More than 7,100 Palestinians have been wounded.
Israel has lost 56 soldiers since launching a ground operation earlier this month aimed at destroying rocket launchers and tunnels used for attacks inside Israel. Three civilians have been killed on the Israeli side since the fighting began on July 8.
In the southern town of Khan Younis, 10 members of one Palestinian family died when an airstrike hit a relative's home where they had sought refuge, al-Kidra said. After the strike, relatives climbed over piles of debris, surveying shattered windows and demolished walls.
In the Gaza City neighborhood of Tufah, shelling killed at last seven members of another family, including four children, said Ayman Sahabani, the head of the emergency room at Gaza's Shifa Hospital.
Gazans said they have not been able to properly mourn the mounting number of fatalities, with many foregoing funerals because of the security situation.
In Gaza City, three bodies wrapped in green tarp lay on the bed of a pickup truck, with a charred hand sticking up from one. Ordinarily, crowds of people would accompany bodies to cemeteries, but on Wednesday, only a small number of relatives rode among the bodies.
Israel says its Gaza operation is meant to stop Hamas rocket and mortar fire that has reached increasingly deeper into its territory and to destroy a sophisticated network of tunnels used for attacks inside Israel.
Gaza militants have fired more than 2,600 rockets toward Israel over the past three weeks, according to the Israeli army. Over the past 23 days, Israeli forces have hit 4,100 targets in Gaza, about one-third connected to rocket launching, a statement said.
The military has not provided details on strikes in which multiple members of one family were killed. There have been several dozen such strikes, according to the Palestinian human rights group Al-Mezan.
The military says Hamas militants often launch rockets from crowded residential areas, thus endangering civilians. The army says it has also warned civilians by phone and leaflet to leave dangerous areas.
On Wednesday, aircraft dropped leaflets over Gaza City's Rimal neighborhood, urging residents to stay away from Hamas militants and to report possible rocket launches. The leaflet gave a contact phone number and email and warned of a new operation.
Israeli leaders have said that troops will not leave until all the Hamas tunnels have been demolished. The army said 32 tunnels have so far been located but did not say how many remain.
Enav reported from Jerusalem. Associated Press writers Ibrahim Barzak in Gaza City and Yousur Alhlou in Jerusalem contributed to this report.
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.