Hamas says it is battling Israeli troops on the outskirts of the Gaza Strip's crowded southern city of Rafah after a US official said Washington had halted a shipment of powerful bombs that Israel could use in a full-scale assault.
The United States, which is seeking to stave off an Israeli invasion of Rafah, said it believes a revised Hamas ceasefire proposal could lead to a breakthrough in an impasse in negotiations, with talks resuming in Cairo on Wednesday.
Israel has threatened a major assault on Rafah to defeat thousands of Hamas fighters it says are holed up there but Western nations and the United Nations have warned a full-scale attack on the city would be a humanitarian catastrophe.
Hamas said its fighters were battling Israeli forces in the east of Rafah, where hundreds of thousands of Palestinians have sought refuge from combat further north in the enclave.
Islamic Jihad said its fighters attacked Israeli soldiers and military vehicles with heavy artillery near the airport east of Rafah.
"The streets of the city echo with the cries of innocent lives lost, families torn apart, and homes reduced to rubble," Rafah's mayor, Ahmed Al-Sofi, said in an appeal to the international community to intervene.
"We stand on the brink of a humanitarian catastrophe of unprecedented proportions."
Abound 10,000 Palestinians have left Rafah since Monday, said Juliette Touma, spokeswoman for UNRWA, the UN agency for Palestinian refugees.
The Hamas-run Gaza government media office put the number at tens of thousands.
A senior US official said President Joe Biden's administration paused a shipment of weapons to Israel last week in an apparent response to the expected Rafah offensive.
The White House and Pentagon declined to comment.
Washington is Israel's closest ally and main weapons supplier.
A senior Israeli official, asking not to be named, said "if we have to fight with our fingernails, then we'll do what we have to do".
A military spokesperson said any disagreements were resolved in private.
Israeli tanks rolled across the Rafah border crossing between Gaza and Egypt on Tuesday, cutting off a vital aid route and the only exit for the evacuation of wounded patients.
The complex was closed for a second day on Wednesday, according to the Gaza health ministry, but Israel said it was reopening the other crossing in southern Gaza, Kerem Shalom.
The Israeli military said it had uncovered Hamas infrastructure in several locations in eastern Rafah and its troops were conducting targeted raids on the Gaza side of the Rafah crossing and air strikes across the Gaza Strip.
It has told civilians, many of whom have been uprooted several times already, to go to an "expanded humanitarian zone" in al-Mawasi, some 20km away.
Armed groups of Hamas, Islamic Jihad and Fatah said in separate statements that gunfights continued in the central Gaza Strip, while residents of northern Gaza reported heavy Israeli tank shelling against eastern areas of Gaza City.
In Cairo, delegations to negotiations from Hamas, Israel, the US, Egypt and Qatar reacted positively to their resumption on Tuesday and meetings were expected to continue on Wednesday, two Egyptian sources said.
CIA Director Bill Burns was to travel from Cairo to Israel on Wednesday to meet Israeli Prime Minister Benjamin Netanyahu and his Mossad counterpart, an Israeli government source said.
Israel on Monday declared that a three-phase proposal approved by Hamas was unacceptable because terms had been watered down.
White House spokesperson John Kirby said a new text presented by Hamas suggests the remaining gaps can "absolutely be closed".
The proposal included a first phase with a six-week ceasefire, an influx of aid to Gaza, the return of 33 Israeli hostages, alive or dead, and the release by Israel of 30 detained Palestinian children and women for each released Israeli hostage, according to several sources.
Israel's offensive has killed 34,844 Palestinians in seven months of war in Gaza, most of them civilians, the Gaza health ministry said.
The war began when Hamas militants attacked Israel on October 7, killing about 1200 people and abducting 252 others, of whom 128 remain hostage in Gaza and 36 have been declared dead, according to the latest Israeli figures.
