Palestinians riding donkey carts are seen Tuesday next to houses destroyed during the Israeli army operation in Jebaliya refugee camp, northern Gaza Strip. (Patrick Baz/Associated Press)United Nations chief Ban Ki-moon on Tuesday denounced Hamas rocket attacks on Israel as "appalling and unacceptable," while also calling for an investigation into Israel's shelling of UN facilities in the Gaza Strip during its three-week offensive against the Palestinian militant group.

The UN secretary general toured the southern Israeli town of Sderot, which has been subjected to almost daily rocket attacks from militants based in Gaza for several years.

Ban said the projectiles are indiscriminate weapons and constitute a violation by Hamas of basic humanitarian law. However, he also urged Israel to end its crippling blockade of Gaza.

Israel has all but sealed its border crossings with Gaza since the expiry of a six-month ceasefire between it and Hamas last month. That was followed by the military campaign that began on Dec. 27 to curb militant rocket attacks into its southern towns. Gaza's southern neighbour Egypt has also kept its border crossings with Gaza closed.

Shelling of UN Gaza buildings 'outrageous'

During a visit earlier in the day to the burned out UN headquarters in Gaza, Ban asked the crowd to observe a moment of silence for victims of the offensive. They included nearly 40 Palestinians who had sought refuge at a UN school shelled by Israel.

Israel initially said militants fired mortar shells at its troops from outside the school, drawing return fire, but UN officials have said Israeli military officials later admitted there was no gunfire from there.

"It is an outrageous and totally unacceptable attack on the United Nations,” said a clearly angry Ban.

'It has been especially troubling and heartbreaking for me as secretary general that I couldn't end this faster.'—Ban Ki-moon, UN secretary general

Calling the crisis a "collective political failure," Ban said he would share the findings of his trip to Gaza with world leaders, including Barack Obama, who was being sworn in Tuesday as U.S. president.

"It has been especially troubling and heartbreaking for me as secretary general that I couldn't end this faster," Ban told reporters.

Earlier in the day, Ban met with Israeli Prime Minister Ehud Olmert and stressed the importance of the full withdrawal of Israeli troops from Gaza and the need to ensure humanitarian aid for the 1.5 million people, the UN press office said in a statement.

Gaza reconstruction to cost billions

Ban's comments came as UN officials estimated rebuilding the heavily damaged Palestinian territory after the conflict could cost billions of dollars and may take years.

Meanwhile, initial estimates by independent surveyors found that the Hamas-run territory lost about $2 billion in assets.

The damage includes 4,100 homes, about 1,500 factories and workshops, 20 mosques, 31 security compounds and 10 water or sewage lines.

Surrounded by rubble, Gazans face a monumental cleanup effort, and many were left homeless after tank shells rendered buildings uninhabitable.

Officials hope to restore water and electricity networks over the next few weeks, but that would depend on Israel allowing spare parts to be brought into the coastal territory.

Even during the shaky six-month ceasefire preceding the war, Israel barely eased restrictions on the flow of goods into Gaza, for fear supplies would end up strengthening Hamas.

Israel plans to keep close control over what is allowed into the Palestinian territory and is waiting for international aid groups to assess damage before considering requests.

"We are not looking to give Hamas a prize," said Peter Lerner, an official in the Israeli military. "There are limits, and the priority is food supplies."

Israel also denied a charge by Arab countries that it had used munitions containing depleted uranium in the offensive.

Israeli Foreign Ministry spokesman Yigal Palmor said the allegations were "poor propaganda" and that similar accusations in the past were groundless.

Troops expected to pull out

Israeli troops were expected to withdraw fully from the territory ahead of Obama's inauguration, if Hamas holds its fire, according to unnamed Israeli officials.

Damage so far is estimated to be around $1.9 billion US, according to separate surveys by the Palestinian Central Bureau of Statistics and a Palestinian economic development council that serves as a liaison between Palestinian Authority President Mahmoud Abbas's government and donor countries. Both are based in the West Bank.

Mohammed Shtayyeh, head of the economic council, estimates rebuilding could take as long as three to five years even under ideal conditions, including Israel and Egypt lifting their blockades and Hamas and Abbas settling their differences.

On Monday, Saudi Arabia's King Abdullah offered $1 billion to help rebuild the Gaza Strip. The international community has also vowed to help.

UN humanitarian chief John Holmes told reporters at UN headquarters on Monday that the agency's staff are trying "to find out as much as they can about how great the damage is and how great the needs are."

He estimated that the cost will be massive.

"I think on the purely humanitarian and early recovery side … it will be hundreds of millions of dollars and no doubt the overall reconstruction costs will be numbered in billions of dollars, but I wouldn't want to put a figure on it beyond that," he said.

Tallying the losses

Hamas civil servants travelled around the territory, taking down names of Gazans who suffered losses.

"Despite the size of the destruction and despite the war, we are still functioning," said Ehab Ghussein, a spokesman for Hamas's Interior Ministry.

The conflict has killed at least 1,259 Palestinians, more than half of them civilians, according to the UN, Gaza officials and rights groups.

Thirteen Israelis have also died, including four soldiers killed inadvertently by their own forces' fire.

With files from the Associated Press