JERUSALEM — Israel's top leadership met Saturday to approve a unilateral cease-fire that would halt the devastating 22-day offensive in Gaza but Hamas vowed to keep fighting until all Israeli forces pull out.

In the hours leading up to the meeting and after it started, Israel kept bombarding Gaza. In the northern town of Beit Lahiya, Israeli shells struck a U.N. school where 1,600 people had sought shelter. One shell scored a direct hit on the top floor of the three-story building, killing two boys, U.N. officials said.

The 12-member Security Cabinet was expected to back an Egyptian-brokered proposal for a 10-day cease-fire during which Israeli troops would remain on the ground while longer term arrangements are hammered out with international backing.

But Hamas spokesman Fawzi Barhoum said a unilateral cease-fire was not enough.

"The occupier must halt his fire immediately and withdraw from our land and lift his blockade and open all crossings and we will not accept any one Zionist soldier on our land, regardless of the price that it costs," Barhoum said.

More than 1,100 Palestinians have been killed in the three weeks of violence, according to Palestinian and U.N. officials. Thirteen Israelis have also died.

Defense Minister Ehud Barak indicated Israel's readiness for a cease-fire, saying the country "was very close to achieving its goals and securing them through diplomatic agreements." He spoke during a trip to southern Israel, which has been the target of militant rocket fire.

Foreign Minister Tzipi Livni indicated that Israel would renew its offensive if Hamas militants continued to fire rockets at Israel after a truce is declared.

"This campaign is not a one-time event," she said in an interview with the Israeli YNet news Web site. "The test will be the day after. That is the test of deterrence."

Egyptian President Hosni Mubarak and U.N. chief Ban Ki-moon both demanded on Saturday an immediate end to the Israeli assault and pullout of all troops.

If the truce is approved, fighting would stop immediately for 10 days. Israeli forces would remain in Gaza during that time and the territory's border crossing with Israel and Egypt would remain closed until security arrangements are made to prevent Hamas arms smuggling.

Israel launched the offensive on Dec. 27 to try to halt near-daily Hamas rocket attacks against southern Israel. Its key demand is for guarantees that Hamas halt the smuggling of rockets, explosives and other weapons through the porous Egyptian border.

Under the deal, Egypt would shut down weapons smuggling routes with international help and discussions on opening Gaza's blockaded border crossings — Hamas' key demand — would take place at a later date.

Cabinet minister Shaul Mofaz, who was attend Saturday night's Security Cabinet meeting, said any deal would also require a mechanism for negotiating the release of Israeli soldier Gilad Schalit who was captured by Hamas more than two years ago.

Egypt has been a key interlocutor in weeks of negotiations to end the assault on Gaza sparked by years of Hamas rocket fire at southern Israel.

Israeli strikes on Gaza kept up even after the Cabinet meeting began. Walls shook and windows trembled in the southern Gaza border town of Rafah as fighter jets soared above head, apparently focusing their missiles on the no-man's land with Egypt where many suspected smuggling tunnels lie.

A total of 13 Palestinians were killed in battles throughout Gaza Saturday, Palestinian medics said.

John Ging, the top U.N. official in Gaza, condemned the attack on Beit Lahiya that killed the two boys — the latest in a series of Israeli shellings that have struck U.N. installations.

"The question that has to be asked is for all those children and all those innocent people who have been killed in this conflict. Were they war crimes? Were they war crimes that resulted in the deaths of the innocents during this conflict? That question has to be answered," he said.

The Israeli army said it was launching a high-level investigation into the shelling, as well as four other attacks that hit civilian targets, including the U.N. headquarters in Gaza. The army investigation also includes the shelling of a hospital, a media center and the home of a well-known doctor.

Ibrahim Barzak reported from Gaza. Associated Press reporter Alfred de Montesquiou contributed to this report from Rafah, Gaza Strip.

Copyright 2009 The Associated Press.