Israeli ground troops encircled Hamas stronghold Gaza City on Friday, after close ally the United States urged "concrete steps" to minimise civilian casualties.
Ahead of top US diplomat Antony Blinken's scheduled visit to Israel Friday, the country's military said it had "completed the encirclement" of Gaza's largest city - signalling a new phase in the month-long war against Hamas.
Prime Minister Benjamin Netanyahu also on Thursday hailed victories so far, telling a group of elite soldiers that Israeli forces were "advancing" despite "painful losses".
"We are in the midst of the campaign. We have very impressive successes" he said at a base near Tel Aviv.
"We are already more than on the outskirts of Gaza City. We are advancing."
Israel's military describes Gaza City as "the centre of the Hamas terror organisation".
But it is also home to some half a million Palestinians who have endured weeks of withering aerial bombardments, dwindling supplies and daily carnage.
Outside Gaza City's Al-Quds hospital, displaced residents seeking shelter from Israeli strikes told AFP that civilians would not withstand the barrage much longer.
"This is not a life. We need a safe place for our kids," said 50-year-old Hiyam Shamlakh. "Everybody is terrified, children, women and the elderly."
But yet more carnage seems to lay ahead, as the conflict turns to urban and underground warfare -- with Hamas fighting from a tunnel complex believed to span hundreds of kilometres (miles).
A new video posted by Hamas sought to illustrate the devastating impact of its underground network, with a gunman seemingly emerging from a tunnel to plant an explosive on a nearby and unsuspecting Israeli tank.
The Ezzedine Al-Qassam Brigades, the military wing of Hamas, insisted invading Israeli soldiers would go home "in black bags".
"Gaza will be the curse of history for Israel," spokesman Abu Obeida said.
Minimise harm
It has now been almost one month since Hamas' bloody raids into Israel killed an estimated 1,400 people.
Israel's allies have backed its right to self-defence, but there is growing global concern and anger at how Israel has chosen to prosecute the war.
The Hamas-run Gaza health ministry says more than 9,000 people have died in Israeli bombardments, mostly women and children.
Departing the United States, Blinken signalled he would press Israel to better protect civilians.
"We will be talking about concrete steps that can and should be taken to minimise harm to men, women and children in Gaza," he told reporters.
But both Israel and the United States have ruled out a blanket ceasefire, which they say would allow Hamas to regroup and resupply.
US President Joe Biden has backed "temporary, localised" pauses in fighting to allow humanitarian work to be done.
"We've seen in recent days Palestinian civilians continuing to bear the brunt" Blinken said, an apparent reference to repeated Israeli strikes on the Jabalia refugee camp north of Gaza City.
Gaza's Hamas-ruled government said 195 were killed in those strikes, with hundreds more missing and wounded, figures AFP could not independently verify.
AFP witnessed rescuers at the camp desperately clawing through the rubble and twisted metal in a frantic search for survivors.
Countries around the world recalled their ambassadors from Israel in protest at the strikes. Bolivia severed diplomatic ties.
United Nations rights monitors warned such bombings of densely populated residential areas "could amount to war crimes."
Israel has sought to show Jabalia was a legitimate target, saying it killed a senior Hamas commander in a tunnel complex below the camp.
Major strikes also hit Gaza's Bureij refugee camp and an area near a UN-run school in Jabalia Thursday, where the health ministry said 27 had died.
Escape to safety
On Thursday some 400 more foreigners and dual nationals managed to escape the war to Egypt, along with 60 wounded Palestinians.
Egypt said it eventually plans to help evacuate 7,000 foreigners through Rafah.
A source at the Rafah border crossing told AFP it will open again on Friday.
Meanwhile, in Israel's north, Lebanon's Hezbollah said it attacked 19 Israeli positions along the border simultaneously.
Some 71 people have been killed in Lebanon since the Israel-Hamas war began, according to an AFP tally.
Hezbollah chief Hassan Nasrallah is on Friday expected to break weeks of silence and deliver a speech that could have a profound impact on the region.
Some analysts believe that Hezbollah has little interest in becoming fully embroiled in a conflict that Israeli officials have threatened could destroy Lebanon.
Others say the decision lies with Iran, which leads the regional "axis of resistance" against Israel - backing Hamas, Hezbollah and rollcall of armed groups from Syria, Iraq and Yemen.