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As Israel's fierce bombardment of the Hamas-controlled Gaza Strip continued into a second day, the UN called yesterday for an independent investigation into how eight young Palestinian students at its main vocational training centre in Gaza City were killed by an air strike as they waited to take the bus home from classes.

With Israeli Prime Minister Ehud Olmert warning that the offensive was "liable to take longer than we can foresee", ministers authorised the call-up of 6,500 army reservists, and tanks and armoured vehicles took positions along the border, poised for a possible ground invasion, which defence chief Ehud Barak has warned will take place if rocket fire from Gaza is not halted. The Palestinian death toll rose to 296 as the Israeli attack widened to include more than 40 tunnels used by Hamas to circumvent an Israeli blockade and smuggle vital supplies across the border from Egypt. Meanwhile, Israeli emergency services said that Gazan militants fired more than 80 rockets and mortars at southern Israel yesterday, including two that penetrated deeper into its territory than ever before, landing in the port city of Ashdod.

The strike which killed the eight students – some thought to be as young as 16 – and wounded 20 others came during the height of Saturday's bombardment at around 1.20pm. They were waiting for buses close to the main headquarters of the UN refugee agency, UNRWA, when they were hit by shrapnel and debris. UN officials believe the single, massive explosion that killed the students could have been aimed at a Hamas policeman in the area or a nearby regional government building used by the previous Fatah administration.

Speaking from his hospital bed, a wounded engineering student, Hazem Sami Rikhawi, 20, from Rafah, described what happened in the attack, which came to light yesterday. He was waiting with other students after finishing a design exam. "Suddenly, a large missile fell among the girls. Two of them died. I was holding anotebook, covering my face. There was a big boom. My friend, Ahmad Halaby, fell on me. He was vomiting blood from his nose and mouth. 'Save me Hazem' – these were his last words before he died. I will never forget his eyes and his faint voice asking for help.

"Then I was taken to hospital. They took me to the room of the dead. They were about to put me on the shelf of the refrigerator. I heard a noise. I opened my eyes. Then people said: 'He is alive'. There is still shrapnel in my legs and arms."

Ahmed Abu Neiji, a UNRWA security guard who witnessed the carnage, said the strike looked "deliberate". He added: "I tried to revive some of the people. I didn't see much blood – just bodies lying on the ground."

Christopher Gunness, UNRWA's chief spokesman, said: "Whatever was targeted, the fact is that it happened near a large crowd of young civilians. We need an investigation which will establish the full facts and deliver accountability."

Despite the tank positions and reservists call-up, Israel's Foreign Minister, Tzipi Livni – who hopes to become prime minister after elections scheduled for February and had been pressing for tougher action against Hamas before the bombardment – insisted yesterday that "Our goal is not to reoccupy Gaza Strip". Asked on Fox News if Israel was out to "topple" Hamas, which seized control from Fatah in June 2007, she replied: "Not now."

Mark Regev, a spokesman for Mr Olmert, said Israel would press on with the campaign "until we have a new security environment in the south, when the population there will no longer live in terror and in fear of constant rocket barrages". The Israeli military said the "vast majority" of victims in this weekend's attack were uniformed Hamas personnel but the high- profile call for an inquiry by UNRWA into the deaths of its students will fuel debate about civilian casualties. Israel yesterday refused foreign journalists entry into Gaza to report on the aftermath of one of the bloodiest days for Palestinians in 60 years of conflict.

Captain Benjamin Rutland, an Israel Defence Forces spokesman, said that precision targeting of Hamas installations – around 240 of which are believed to have been attacked in the past two days – was designed to minimise civilian casualties. "Obviously, there are going to be some ... because Hamas cynically and specifically builds its facilities in residential areas. But we do our utmost to avoid them." Many of the targeted Hamas police moonlighted as "terrorists".

Hamdi Shaqura, an official at the Palestinian Centre for Human Rights, said that at least 20 of the victims were under 18 and nine were women. He said he did not accept that the bombardment was hurting Hamas more than ordinary people and added that most of the Hamas personnel attacked had been civil policemen and not members of the armed Izzedine al Qassam brigades.

At least one Palestinian was reported killed by Egyptian security forces as hundreds of Gazans sought to flee the Strip through what one Egyptian security officer said were four breaches they had made in the border. There were earlier reports that Hamas officers had prevented wounded people leaving via that route.

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