Israeli forces are gearing up for a ground assault on Hamas in the southern Gaza city of Rafah, where hundreds of thousands of people displaced by violence further north are trapped in desperate conditions.
Prime Minister Benjamin Netanyahu's office said the military had been told to come up with a plan to evacuate the city but aid agencies warned that a military offensive in such a densely populated area could end up killing large numbers of innocent people.
"There is a sense of growing anxiety, growing panic in Rafah because basically people have no idea where to go," said Philippe Lazzarini, the head of the UN Palestinian refugee agency UNRWA.
US President Joe Biden said Israel's response to the October 7 attacks by Hamas militants was "over the top" and Washington said it would not support any military operation mounted in Rafah without due consideration for civilians.
More than a million people driven southwards by four months of Israeli bombing of Gaza are packed into Rafah and surrounding areas on the coastal enclave's border with Egypt.
Netanyahu's office said four Hamas battalions were in Rafah and Israel could not achieve its goal of eliminating the Islamist militants while they remained there.
Civilians should be moved from the combat zone, it said.
"Therefore, Prime Minister Benjamin Netanyahu has ordered the IDF (Israel Defence Forces) and the security establishment to submit to the cabinet a combined plan for evacuating the population and destroying the battalions."
The statement, issued two days after Netanyahu rejected a Hamas ceasefire proposal that also envisaged the release of hostages held by the Palestinian militant group, gave no further details.
The United Nations said Palestinian civilians in Rafah needed to be protected but there should not be any forced mass displacement, which it said went against international law.
"We're extremely worried about the fate of civilians in Rafah," UN spokesman Stephane Dujarric said.
The Palestinian presidency said Netanyahu's plans for a military escalation in Rafah aimed to displace the Palestinian people from their land.
"Taking this step threatens security and peace in the region and the world. It crosses all red lines," said the office of Mahmoud Abbas, head of the Palestinian Authority in the Israeli occupied West Bank.
Israeli forces have shifted their offensive southwards towards Rafah after initially storming northern Gaza in response to the October 7 rampage in southern Israel by Hamas gunmen who rule the coastal strip.
Doctors and aid workers in Rafah are struggling to supply even basic aid to those sheltering there, many of them penned up against the border fence with Egypt and living in makeshift tents.
"No war can be allowed in a gigantic refugee camp," said Jan Egeland, secretary-general of the Norwegian Refugee Council, warning of a "bloodbath" if Israeli operations expanded there.
Gaza's health ministry said at least 27,947 Palestinians had been confirmed killed in the conflict, 107 of them in the previous 24 hours, and 67,459 injured.
Many more could be buried under rubble from Israeli attacks since Hamas militants killed 1200 people and took 253 hostages in the October 7 attack, according to Israeli tallies.
Hours before Netanyahu's statement, Israeli warplanes carried out new sorties in the area of Khan Younis and in northern and central Gaza in which Palestinian health officials said at least 15 people had been killed, eight of them in the Rafah area.
Biden said he had been pushing for a deal to pause fighting to allow the release of hostages, increase humanitarian aid reaching Palestinian civilians, and normalise relations between Israel and Saudi Arabia.
Hamas this week proposed a ceasefire of four-and-a-half months, during which remaining hostages would go free, Israel would withdraw its troops and agreement would be reached on ending the war.
Netanyahu said Hamas' terms, offered in response to a proposal drawn up by US and Israeli spy chiefs with Qatar and Egypt, were "delusional" and vowed to fight on.
A Hamas official told Reuters on Friday that a delegation from the group had concluded talks with mediators in Cairo and was waiting for the official Israeli response to its proposal.
