Its military unleashed an attack on the southern border city of Rafah that was so furious, the Ministry of Health pleaded for international assistance to evacuate the dead and injured from the fire zone.

Israeli forces, backed by tank fire and airstrikes, moved deeper into southern Gaza late Friday to search for the missing soldier, 23-year-old Second Lieutenant Hadar Goldin, as residents reported intensive tank and mortar fire around Rafah and Khan Younis.

At least 107 Palestinians were killed in Rafah alone, many of them children, and more than 350 were wounded, local health authorities said, describing scenes of chaos as al-Nasser Hospital struggled to cope with the influx of dead and wounded. It took the Palestinian death toll to 1635, with a further 8840 wounded, many of them civilians, the Ministry of Health in Gaza said.

Israel has lost 63 soldiers and three civilians. Militants in the Gaza Strip launched at least 61 rockets into Israel following the ceasefire's collapse, including two on Saturday morning, the IDF reported.

Both Israel and Hamas accuse each other of breaking the ceasefire that came into effect at 8am local time on Friday, with the United States backing Israel’s assertions that Hamas militants had taken advantage of the ceasefire to launch an attack on Israeli soldiers near Rafah.

It was in that attack, Israel says, that Lt Goldin was captured and two other IDF soldiers were killed, about 90 minutes after the ceasefire came into effect.

“It was an outrageous violation of the ceasefire negotiated over the past several days, and of the assurances given to the United States and the United Nations,” US Secretary of State John Kerry said. “After the horrific loss of life in this attack and its aftermath, it would be a tragedy if this outrageous attack leads to more suffering and loss of life on both sides of this conflict.”

The United Nations also condemned the violation of the ceasefire but stressed it had “no independent means to verify exactly what happened.” Through a spokesman, the Secretary-General Ban Ki-moon condemned the reported violation by Hamas, saying he was “shocked and profoundly disappointed by these developments”.

However, a statement released by al-Qassam Brigades, the military wing of Hamas, cast doubt on Israel’s claims that Hamas was holding 2nd Lieutenant Goldin. It says it was at 7am – prior to the ceasefire – that a group of its fighters ambushed Israeli soldiers in the south of Gaza and in the ensuing firefight, both Israeli soldiers and militants died.

"We have lost contact with the group of mujahedeen who were at the ambush," the Qassam Brigades statement reads.

If the Israeli soldier was there, he was killed in the ambush, the Qassam Brigades said, claiming it saw Israeli soldiers advancing further inside Gaza, indicating the IDF’s intention to take more ground during the ceasefire.

Lt Goldin is from Kfar Saba, near Tel Aviv, but is understood to have spent time in Britain when he was aged 12 and 15, when his parents - both academics - taught briefly at Cambridge University.

Both were said to have been active in Cambridge's Jewish community.

Moussa Abu Marzouk, Hamas' deputy leader, told Al-Arabiya news channel that al-Qassam Brigades had not carried out any military operations after 8am when the temporary lull in fighting came into force.

Thousands of Palestinians were caught in the shelling on Friday as the ceasefire collapsed just hours after it began, many of them taking the opportunity of the lull to go back to their homes they had been forced to leave weeks ago.

In Beit Hanoun, Sihan Nasser had come with her family to see what was left of their house that they had only been able to visit once since July 15 when IDF shelling had forced them to flee.

“We were not able to retrieve anything from the rubble, four stories of the house had collapsed completely,” she said. In her extended family, 11 people had died since the conflict began on July 8, she said.

As Fairfax Media walked along one of the main streets of Beit Hanoun, past small apartment blocks blasted to the ground, donkeys and horses lay dead on the streets and whole families sat in the rubble in front of their devastated homes.

Women were weeping. “We returned here during a short ceasefire four days ago and our house was still standing, now there is nothing left,” said Ayman Kefana. Soon after, Israeli tanks stationed just a kilometre away near the border began shelling again and families began to run as the thud of shells sounded nearby and plumes of dust rose into the air. It was clear the ceasefire was over.