The rapid outbreak of COVID-19 is a global health problem that has a significant effect on the educational systems. Therefore, students shifted to distance learning through the digital platform. Since COVID-19 has consequences on mental health, the present study examined the perceived stress level in school students in distance learning during the COVID-19 period. A cross-sectional study of a sample consisting of 385 school students evaluated the Perceived Stress Scale (PSS) and their concerns and emotions during the COVID-19 pandemic. The results showed that the mean value of the total PSS scores was 19.50 ± 9.28. About 48.6% of students had moderate stress, 28.8% had low stress, and 22.6% had high stress. Significant associations were found between the level of stress and demographic variables: age, gender, educational level, and place of residence. Female students were significantly higher than the male students in the mean score of perceived stress level (20.14 versus 18.13;
p
-value = 0.018). Females were more likely (53.4%) to have moderate stress than males (38.2%) (
p
= 0.019). The students aged 15–18 years were significantly higher than those aged 11–14 years in the mean score of perceived stress level (22.64 versus 17.24, respectively;
p
-value < 0.001). The students aged 15–18 years were also more likely (
n
= 536, 96.4%) to had high levels of stress than the younger students (
p
< 0.001). The results showed that secondary school students were significantly higher than primary school students in the mean score of perceived stress level (23.75 versus 16.76, respectively;
p
< 0.001). Secondary students were also more likely (43.0%) to have high stress than primary students (9.4%) (
p
< 0.001). Students who live in the Rafah governorate had a significantly lowest mean score of perceived stress level when compared to other counterparts (
p
-value = 0.005). Gender (
β
= − 0.282,
P
< 0.001), age (
β
= − 0.379,
P
= 0.004), place of residence (
β
= − 0.096,
P
= 0.034), and educational level (
β
= 0.845,
P
< 0.001) were predictors of perceived stress. The results revealed moderate to high levels of stress in school students in the Gaza Strip during schools closure due to the COVID-19 pandemic. The prevalence of psychological distress attributed to suddenly shifted from traditional learning to distance learning. The incorporation of stress management programs and online counselling will minimize stress and enhance the mental health of school students during distance learning.