Israel has told the United Nations that the planned 72-hour humanitarian ceasefire is over and it will continue its military operation in the Gaza Strip.

The Israeli military blamed Hamas for breaching the ceasefire just hours after the start of the truce by launching a mortar attack into Israel.

"This is once more that Hamas and terror organizations in Gaza are grossly violating the agreed-upon cease-fire, this time before the U.S. secretary of State and the UN Secretary General," a source in Israeli Prime Minister Benjamin Netanyahu's Office said.

The Palestinian Interior Ministry said that Israeli shelling, just hours into the ceasefire, killed 25 people near the southern town of Rafa.

The Israeli military informed UN Middle East envoy Robert Serry of their decision to proceed with the ground and air offensive and warned the people of Gaza to stay indoors. The operation is aimed at "neutralising" Hamas' sophisticated tunnel network used to infiltrate Israel.

The truce had been mediated by the United States and the United Nations to allow the residents of Gaza a reprieve from the conflict. It was hoped that restoring quiet would allow a breakthrough to be found in any resulting negotiations between the two parties.

According to Palestinian officials, 1,460 Palestinians - the majority civilians - have been killed in the conflict. The Israeli military has confirmed that 63 Israelis - 61 of those soldiers - have been killed in the ongoing clashes.