At least 16 people have been killed in an Israeli air strike on a school in the Gaza Strip, Palestinian officials have said.

Dozens more have been injured in the attack on the building which was sheltering thousands of displaced people at Nuseirat refugee camp in central Gaza, according to the Hamas-run health ministry.

Video from the scene shows adults and children screaming in a smoke-filled street covered in dust and rubble, as they run to help the wounded.

The Israel Defence Force (IDF) said it struck several “terrorists operating in structures located in the area of Al-Jaouni School”.

Eyewitnesses told the BBC that the attack targeted the upper floors of the school, which is located near a busy market.

The BBC understands that up to 7,000 people were using the building as shelter.

A local source said the target was a room allegedly used by Hamas police. The BBC is unable to verify this claim.

In a statement posted to X – formerly known as Twitter – the IDF confirmed it had hit the school buildings, saying it had taken “numerous steps” to “mitigate the risk of harming civilians, including the use of precise aerial surveillance and additional intelligence”.

Hamas militants were using the location as a “hideout” to carry out attacks against IDF troops, it said.

“Hamas continues to systematically violate international law by exploiting civilian structures and the civilian population as human shields for its terrorist attacks against the State of Israel,” it added.

The incident comes after hopes began to rise in recent days that a deal between Israel and Hamas was on the horizon, following months of false starts.

Many schools and other UN facilities have been used as shelters by the 1.7 million people who have fled their homes during the war, which has lasted almost eight months.

A previous attack in June on another packed UN-run school in Nuseirat killed at least 35 people.

Local journalists told the BBC at the time that a warplane fired two missiles at classrooms on the top floor of the school.

After that attack, Israel’s military said it had “conducted a precise strike on a Hamas compound” in the school and killed many of the 20 to 30 fighters it believed were inside.

Gaza’s Hamas-run Government Media Office denied the claim and accused Israel of carrying out a “horrific massacre”.

The head of the UN agency for Palestinian refugees (Unrwa), which runs the school, described the June incident as “horrific” and said the claim that armed groups might have been inside a shelter was “shocking” but could not be confirmed.

Israel’s war was triggered by Hamas’s unprecedented attack on Israel on 7 October in which Hamas-led gunmen killed about 1,200 people and took 251 others back to Gaza as hostages.

At least 38,098 Palestinians have been killed in Gaza as a result of Israel’s offensive, according to the territory’s Hamas-run health ministry.