At least 17 Palestinians have been killed and 200 wounded in the bombardment of a market near Gaza City during an "humanitarian pause" unilaterally announced by Israel.

The attack came shortly after the Israeli army said it was observing a four-hour Wednesday ceasefire from midday GMT, or 3pm local time on Wednesday.

Ashraf al-Qedra, a spokesman for Gaza's health ministry, said missiles hit the busy market in the battered Shujayea neighbourhood, in the east of Gaza Strip.

An Israeli military spokeswoman told Al Jazeera that it was checking the reports but added that Shujayea - which was heavilly bombarded last week killing of scores of people - was not in the areas covered by its humanitarian pause.

"The first shell hit, and people immediately started evacuating the wounded," a man called Abu Maysarah told the AFP news agency. "They (the Israelis) saw them evacuating the wounded, and they struck them again."

Hamas condemned the deaths as "another blatant massacre".

"The Israelis are committing deliberate acts of mass murder... the blood of innocent people in Gaza will not be shed in vain and the hand of justice will reach all of those who planned and carried out these massacres."

Al Jazeera's Nicole Johnston, reporting from Gaza City, said that the death toll was likely to increase given the numbers injured.

"This attack was on the outskirts of Shujayea," she said. "People are still living on the edges of the area. Horrific scenes have been reported."

However, Johnston said there had been no let-up in the attacks during the Israeli pause.

"There has been a lot of death in the last two hours," she said as the pause was coming to a close. "The ceasefire has not been particularly useful. There has been no change - up to 100 people have been killed today alone."

According to Gaza's Health Ministry, 1317 Palestinians have been killed and more than 7340 injured since Israel's Protective Edge offensive in the Gaza Strip began on July 8.

Hamas spokesman Sami Abu Zuhri had earlier dismissed the Israeli pause. He told Reuters: "The ceasefire Israel declared is for the media and has no value because it does not include the areas of conflict on the border."