Dozens of civilians have reportedly been killed after Israel launched an air strike against a school that it claimed terrorists were hiding in.

The US has told Benjamin Netanyahu’s government it must be “transparent” over the circumstances of the attack.

The strike hit al-Sardi school, which is run by the Unrwa Palestinian refugee agency, in the early hours of Thursday morning.

Gaza’s Hamas-run health ministry claimed 40 people had been killed, while Unrwa’s commissioner-general said at least 35 had died with many more injured.

Around 6,000 people are thought to have been sheltering in the school at the time of the attack.

The Israeli military provided the names of nine slain terrorists it claimed to have targeted.

US State Department spokesperson Matthew Miller said he had seen reports that 14 children had been killed in the blast.

"If that is accurate that 14 children were killed, those aren’t terrorists," he said.

"And so the government of Israel has said they are going to release more information about this strike... We expect them to be fully transparent in making that information public.”

Israeli military spokesman Lt Col. Peter Lerner said the IDF was “very confident” in their intelligence and accused Hamas and Islamic Jihad fighters of deliberately using UN facilities as bases.

"I'm not aware of any civilian casualties and I'd be very, very cautious of accepting anything that Hamas puts out," he said.

Twenty to 30 fighters were located in the compound, with many of them killed in the attack, Lerner claimed.

In a statement, the IDF said they had carried out a "precise strike on a Hamas compound embedded inside" the school.

They claim classrooms on two upper floors of the building had terrorists hiding inside them.

United Nations Secretary-General Antonio Guterres condemned the strike, saying UN properties must be “inviolable”.

A White House National Security Council spokesperson said: "As a general matter, and as we’ve said before, Israel has a right to go after Hamas. But we’ve also been clear that Israel must take every precaution possible and do more to protect civilians.”

Speaking to BBC Arabic, a man living at the school, Udai Abu Elias, said civilians had been killed in the attack.

“I was asleep when the incident occurred,” he said.

"Suddenly we heard a loud explosion and shattered glass and debris from the building fell on us. Smoke filled the air and I couldn't see anything. I didn't expect to make it out alive.

"I heard someone calling for survivors to come out from under the rubble. I struggled to see as I stumbled over the bodies of the martyrs.”

He added: “The situation has become extremely difficult, especially for children and the elderly. Everyone is a target. The blood of the martyrs has not yet dried; it stains the stairs, walls, and bedding."

In video footage published by Reuters, a Palestinian boy, Imad al-Maqadmeh, can be seen recovering from the strike at the the Al-Aqsa Martyrs Hospital.

"What did we do?” he asked. “There are no armed people in the school. The ones there are children, playing.”

Sam Rose, the director of planning for Unrwa, told The Guardian he was not surprised to see an IDF strike cause civilian causalities. 

“When everyone is living in cramped, overcrowded conditions, we always said it would be inevitable that there would be incidents such as the one that happened overnight in the school in Nuseirat,” he said.

“We’ve seen this time and time again, to the extent that it’s almost become normalised. 

“We have normalised horror.”