Israel's military said its aircraft had targeted "terrorists" operating around the Al-Jawni school in Nuseirat, central Gaza.
The health ministry in the Hamas-run territory, which condemned the strike as an "odious massacre", said 50 injured were taken to hospital from the school.
Some 7,000 people were sheltering in the school at the time of the attack, the Hamas government press office said. Dozens of people scrambled through the rubble after the strike to find survivors.
The press office said the school was run by the UN agency for Palestinian refugees, UNRWA, and most of the casualties were "children, women, and elderly".
"This is the fourth time they have targeted the school without warning," said one woman, Samah Abu Amsha, who told how some children were killed as they read the Koran in a class when the missile hit.
"Shrapnel flew at me inside the classroom and the children were injured," she told AFP.
Hamas called the attack "a new massacre and crime committed by this criminal enemy as part of its war of genocide against our Palestinian people".
The Israeli military said in a statement it "struck several terrorists operating in structures located in the area of UNRWA's Al-Jawni school".
"This location served as a hideout and operational infrastructure from which attacks against IDF troops operating in the Gaza Strip were directed and carried out," it added, insisting that "steps were taken in order to mitigate the risk of harming civilians".
'No place is safe'
Israel has agreed to meetings with mediators on a ceasefire initiative but has kept up its offensive in the territory that started on October 7 after the Hamas attack on southern Israel.
UNRWA said two of its workers were killed in a strike at Al-Bureij, also in central Gaza, early Saturday. The agency has a major food warehouse in the district.
The Al-Aqsa hospital said nine other bodies were brought to its morgue from the strike.
The UN agency said 194 of its workers have now been killed since the war started.
An UNRWA spokesperson said that since the war began, more than half of the agency's facilities have been hit and many were shelters. "As a result at least 500 people sheltering in those facilities have been killed," the spokesperson told AFP.
Paramedics said 10 people, including three journalists, died in another strike on a house in Nuseirat on Saturday.
"Absolutely no place in the Gaza Strip is safe," said civil defence spokesman Mahmud Bassal.
The war began with the October 7 attack on southern Israel that resulted in the deaths of 1,195 people, mostly civilians, according to an AFP tally based on Israeli figures.
Hamas militants also seized hostages, 116 of whom remain in Gaza including 42 the military says are dead.
In response, Israel has carried out a military offensive that has killed at least 38,098 people in Gaza, also mostly civilians, according to data from the Hamas-run health ministry there.
