Israeli forces on Wednesday said they were carrying out an operation in Gaza's largest hospital targeting what it calls a "Hamas command centre", allegedly located below thousands of ailing patients and sheltering civilians.
It has presented no evidence of these claims and they have been denied by Gaza authorities and independent witnesses.
The raid comes after the hospital complex was continuously bombarded for over four hours.
Around 650 patients and 5000-7000 sheltering civilians are trapped in the hospital.
Meanwhile, the director of the hospital said on Tuesday that 179 people, including babies and patients who died in the intensive care unit, had been buried in a "mass grave" at the hospital complex.
Israeli Army tanks were massed near the gates of Gaza's main hospital where civilians were trapped in dire conditions on Tuesday. US President Joe Biden called on Israel to protect the complex.
"We were forced to bury them in a mass grave," said Al-Shifa hospital director Mohammad Abu Salmiyah, adding that seven babies and 29 intensive care patients were among those buried after the hospital's fuel supplies ran out.
Reports say that premature babies dying due to the lack of electricity and patients facing gunfire, a surgeon working for Doctors Without Borders said.
Israel has agreed to daily pauses in military operations around specified humanitarian "corridors" to allow Gazans to flee fighting, but insisted there will be no broader ceasefire before hostages are released. Qatar is mediating talks on a possible deal to free the hostages.