Four children were killed in Gaza City on Wednesday, medics said, in Israeli shelling witnessed by The Telegraph and other foreign journalists.
The four were among a group on the beach when the attack took place, emergency services spokesman Ashraf al-Qudra said, with some of the surviving injured children taking refuge at a nearby hotel where journalists were staying.
Journalists heard two loud explosions outside the Gaza City hotel, before children were pulled into the restaurant area for treatment.
A journalist who saw the incident said some of the children who survived were running away when another shell seemed to be aimed at them.
So far, Israel's campaign, now in its ninth day, has killed 214 Palestinians, with a Gaza-based rights group saying over 80 percent of them were civilians.
In the same period, militants have fired more than 1,200 rockets at Israel, which on Tuesday claimed their first Israeli life.
Hamas said it had rejected the Egyptian truce efforts because it had not been included in the discussions.
The peace initiative continued on Wednesday, however, with a Hamas official holding talks with Egyptian leaders even as Palestinian president Mahmud Abbas also arrived in the Egyptian capital to join the diplomatic initiative.