Palestinians transport casualties following what health officials said was Israeli fire on people waiting for aid in Gaza City, in this still picture taken from a video on Thursday. Reuters

More than 750 people were also hurt in the incident, the ministry said. It came after aid agencies had intensified warnings over Gaza's humanitarian situation, with famine threatening particularly in Gaza's north.

The Gaza City shooting adds to a Palestinian death toll from the war, which the health ministry earlier Thursday said had topped 30,000.

The incident caused the largest loss of civilian lives in weeks. Palestinian President Mahmoud Abbas said it was an "ugly massacre conducted by the Israeli occupation army on people who waited for aid trucks at the Nabulsi roundabout."

Ministry spokesman Ashraf Al Qudra said hundreds were killed and wounded from "bullets of the occupation forces that targeted a gathering of citizens" at Gaza City's Nabulsi roundabout. He called it a "massacre."

A witness told AFP that "thousands of people" had "just stormed the trucks," which were near army tanks.

"The soldiers fired at the crowd as people came too close to the tanks," the witness said, declining to be named for safety reasons.

An injured man is tended to on floor of Shifa Hospital in Gaza City on Thursday. AP

Israeli sources confirmed that troops opened fire at Palestinians rushing toward aid trucks in Gaza, with one saying soldiers thought they "posed a threat" to troops.

 'Serious incident'

 One video shared on social media, which Reuters was able to verify as being at the roundabout, showed trucks loaded with many dead bodies, as well as wounded people.

Another, which Reuters could not verify, showed bloodstained people being carried in a truck, bodies wrapped in shrouds and doctors treating injured patients on the hospital floor.

"We don't want aid like this. We don't want aid and bullets together. There are many martyrs," a man said in one of the videos.

The US said it was looking into reports of what it called a "serious incident."

Palestinians receive medical care at Kamal Edwan Hospital in Beit Lahia, Gaza City. AFP

"We mourn the loss of innocent life and recognise the dire humanitarian situation in Gaza, where innocent Palestinians are just trying to feed their families," a White House National Security Council spokesperson said, adding it underscored the need to get more humanitarian aid into Gaza, including through a potential ceasefire.

Mediators from Egypt, Qatar and the United States have been seeking a six-week pause in the war.

Negotiators hope a truce can begin by around March 10 or 11 when the Muslim Holy Month of Ramadan begins, depending on the lunar calendar.

Famine 'imminent'

The United Nations humanitarian agency OCHA described the food security situation as "extremely critical across Gaza, particularly in northern Gaza."

According to the World Food Programme (WFP), no humanitarian group had been able to deliver aid to the north for more than a month. The agency accused Israel of blocking access. "If nothing changes, a famine is imminent in northern Gaza," WFP's deputy executive director Carl Skau said.

With aid flows on the ground limited, more is coming in by parachute.

Neighbouring Jordan said it had on Thursday again air-dropped food and other relief. Jordan's army said the drop over northern Gaza came in collaboration with Bahrain and Oman.

The United Arab Emirates' official news agency WAM said the Gulf country had begun a joint operation with Egypt to drop food and medical aid. The operation would last several weeks, it said.

In the south, nearly 1.5 million people trying to flee the fighting are now packed into Rafah city, also short of food, as Israel threatens to send in troops against Hamas fighters there.

"They are 30,000 martyrs. I don't know what (Israel) want from us, and why they killed this number. It is a genocide," said Jihad Salha, one of the displaced in Rafah. Intense fighting has taken place in Khan Yunis city a few kilometres from Rafah.

 Agencies