Devastation after Israeli army operation in Gaza City's Shujaiya

Fighting and bombardment shook Gaza's biggest city on Thursday, an AFP correspondent said, even after Israel's military declared an end to its operation in an eastern district that saw Gaza City's heaviest combat in months.

The upsurge in fighting, bombardment and displacement came as talks were held in the Gulf emirate of Qatar towards a truce and hostage release deal after more than nine months of war.

But Prime Minister Benjamin Netanyahu demanded Thursday that Israel retain control of key Gaza territory along the border with Egypt -- a condition that conflicts with Hamas's position that Israel must withdraw from all Gaza territory after a ceasefire.

Gaza's Hamas rulers said troops had pulled back from Gaza City's eastern district of Shujaiya, leaving "more than 300 residential units and more than 100 businesses destroyed".

Witnesses said tanks and troops had moved on to other parts of Gaza City. An AFP correspondent reported air strikes on the Sabra neighbourhood while militants engaged in heavy clashes with Israeli forces in Tel al-Hawa.

Explosions and orange flashes shook the darkened city before daylight brought automatic weapons fire, AFPTV images showed.

Hamas reported 45 air strikes in the Gaza City area, as well as in Gaza's southernmost city of Rafah, where Netanyahu had said the intense phase of the war was nearing its conclusion.

'Delaying tactics'

Netanyahu's office confirmed that its negotiating team, led by Mossad intelligence chief David Barnea, had returned to Israel following talks with mediators in Doha on Thursday.

Speaking after the team's return, Netanyahu said Israel needed control of the Palestinian side of Gaza's border with Egypt to stop weapons reaching Hamas.

He added that Israel must also be allowed to keep on fighting until its war aims of destroying Hamas and bringing home all hostages are achieved.

A new delegation will head to Cairo on Thursday evening "to continue the talks", Netanyahu's office said.

Hamas said it had not been informed "of any new developments" from the latest talks and accused Israel of "delaying tactics" aimed at "sabotaging" the truce efforts.

On Wednesday, the Washington Post had reported that both Israel and Hamas had "signalled their acceptance of an 'interim governance' plan" in which neither would rule the territory and a US-trained force of Palestinian Authority supporters would provide security.

Netanyahu separately met US President Joe Biden's special envoy for the Middle East, Brett McGurk.

In Washington, the Pentagon announced it will soon permanently end its problem-plagued effort to deliver aid to Gaza by sea from Cyprus using a temporary pier.

The $230-million pier has repeatedly been detached from the shore because of weather conditions since its initial installation in mid-May, and the project also faced problems with the distribution of supplies after they had been landed.

Hamas's October 7 attack on southern Israel that sparked the war resulted in the deaths of 1,195 people, mostly civilians, according to an AFP tally based on Israeli figures.

The militants also seized hostages, 116 of whom remain in Gaza, including 42 the military says are dead.

Israel responded with a military offensive that has killed at least 38,345 people in Gaza, also mostly civilians, according to figures from Gaza's health ministry.

'Dangerous combat zone'

On Wednesday, the Israeli army dropped leaflets warning "everyone in Gaza City" that it would "remain a dangerous combat zone".

The leaflets urged residents to flee, and set out designated escape routes from the area where the UN humanitarian office said up to 350,000 people had been sheltering.

The United Nations said the latest evacuations "will only fuel mass suffering for Palestinian families, many of whom have been displaced many times", and who face "critical levels of need".

An Israeli government spokesman said the aim was "to put civilians out of harm's way" as troops battle militants.

Hamas official Hossam Badran told AFP that Israel was "hoping that the resistance will relinquish its legitimate demands" in truce negotiations.

But "the continuation of massacres compels us to adhere to our demands", he said.

Israel's military said on Wednesday it had completed its mission in Shujaiya after two weeks.

AFPTV images showed Palestinians gathered around a burnt out armoured vehicle beneath a fire-blackened building.

Standing nearby, Mohammed Nairi said he and other residents returned to "immense destruction that defies description. All the houses were demolished."

Gaza's civil defence agency said around 60 bodies had been found under the rubble in Shujaiya.

"Once the Israeli occupation forces withdrew from the Shujaiya neighbourhood, civil defence crews, with local residents, managed to recover about 60 martyrs up to now," agency spokesman Mahmud Bassal said.

Israel's military said operations were also continuing in the Rafah area where "dozens" of militants were killed over the past day.

The military said it responded with air and ground strikes after five rockets were fired from the area towards Israel on Thursday.

Separately, the military acknowledged Thursday it had "failed" to protect Kibbutz Beeri, where more than 100 people died during Hamas's October 7 attacks.

A summary of the inquiry, made public after being presented to kibbutz residents, said there had been a "lack of coordination" in the military response.