Israel launched deadly air strikes on Rafah on Thursday, after threatening to send troops in to hunt for Hamas in the southern Gaza city where around 1.4 million Palestinians have sought refuge.
Major powers trying to find a way to end the destructive war have so far failed, but a US envoy was in Israel Thursday in the latest attempt to secure a truce deal.
International concern has spiralled over Gaza's escalating civilian death toll and the desperate humanitarian crisis sparked by the war following Hamas's October 7 attack against Israel.
The war has also triggered mounting violence in the occupied West Bank, where three Palestinian gunmen opened fire on cars in a traffic jam on Thursday, killing one person and wounding eight, including a pregnant woman.
The attackers were shot dead at the scene, near a Jewish settlement east of Jerusalem.
Israeli far-right politicians quickly called for more citizens to carry weapons and for even greater restrictions on Palestinian West Bank residents, while Hamas urged an escalation in attacks.
More than four months of relentless fighting and bombardment have flattened much of Gaza and pushed its population of around 2.4 million to the brink of famine, according to the United Nations.
Alarm has centred on Gaza's southernmost city of Rafah, where hundreds of thousands of displaced civilians are living in crowded shelters and makeshift camps where disease threatens.
Israel has warned that, if Hamas does not free the remaining hostages held in Gaza by the start of Ramadan on March 10 or 11, it will keep fighting during the Muslim holy month, including in Rafah.
Israel has already been bombing the city, which was again hit overnight, according to news sources.
Gaza's Civil Defence agency reported "a number" of people were killed, while elsewhere in Rafah residents walked amid the rubble of the city's al-Faruq mosque, after strikes.
Another 97 people were killed across the Palestinian territory in the past 24 hours, the health ministry said.
War cabinet member Benny Gantz said Israel's operation in Rafah would begin "after the evacuation of the population", although his government has not specified where civilians could go.
Gazans have said nowhere in the territory is safe.
Hamas's unprecedented October 7 attack resulted in the deaths of about 1,160 people in Israel, according to Israeli figures.
Hamas members also took about 250 hostages- 130 of whom remain in Gaza, including 30 presumed dead, according to Israel.
Israel's relentless campaign has killed at least 29,410 people, mostly women and children, according to the latest count by Gaza's health ministry.
Mediators including the United States, Qatar and Egypt, who have tried and so far failed to broker a ceasefire and hostage release deal, made a new push for an agreement.
Brett McGurk, White House coordinator for the Middle East and North Africa, held talks with Israeli Defence Minister Yoav Gallant, after meeting with other mediators in Cairo who had met Hamas chief Ismail Haniyeh earlier this week.
Israel's Gantz said there were efforts to "promote a new plan for the return of the hostages", adding that "we are seeing the first signs that indicate the possibility of progress in this direction".
US State Department spokesman Matthew Miller said Washington hopes for an "agreement that secures a temporary ceasefire where we can get the hostages out and get humanitarian assistance in".
Israeli Prime Minister Benjamin Netanyahu has insisted the army will fight on until it has destroyed Hamas- but his failure so far to bring home all the captives has led to mounting protests and calls for early elections.
A poll of hundreds of Israelis, published Wednesday, showed a majority do not think "absolute victory" is a likely outcome.
With Arab support, the United States has called for a pathway to a Palestinian state- something Israel's parliament has overwhelmingly rejected.
The UN humanitarian agency said aid to Gaza is being gravely hampered by the "intense hostilities, limitations on the entry and delivery of aid, and growing insecurity".
Volunteer Mohammad al-Oukshia at NGO World Central Kitchen in Rafah said the group was trying to provide "nutritious meals to displaced people" and was hoping to expand to northern Gaza, where famine fears are most acute.
In the southern Gaza city of Khan Younis, medical charity Doctors Without Borders (MSF) said an Israeli tank had fired on a house sheltering their employees and families.
Two relatives of MSF staff were killed and six others wounded, it said, condemning the strike in the "strongest possible terms".
Israeli forces said its army had "fired at a building" identified as a place where "terror activity is occurring", adding that it "regrets" harm to civilians.
The military said troops killed more than 15 fighters in Khan Younis, which has seen fierce fighting.
Elsewhere in the region, the war has led to attacks by Yemen's Iran-backed Houthi rebels in Red Sea shipping lanes vital for global trade.
The Houthis say they are acting in solidarity with Palestinians.
A missile attack on Thursday caused a fire on board a vessel transiting the Gulf of Aden, causing a fire on board, two maritime security agencies said.