Hundreds of people killed as battle rages in Gaza's Khan Younis
Residents said tanks had surrounded a hospital and university where thousands of displaced people were sheltering.
Ambulances were also trapped and unable to reach the wounded.
Khan Younis has been a recent focus of Israeli forces, who are convinced top Hamas commanders are holed up there.
On Sunday, the Israeli military said it had found an underground compound in the city where it believed about 20 Israeli hostages had been held.
Meanwhile in Israel, a number of hostages' families on Monday interrupted a finance committee meeting at the Israeli parliament in Jerusalem, to call for the government to do more to secure their release.
One relative shouted: "We won't let you breathe until our kids come back."
As the US, Qatar and Egypt try to mediate, Hamas has demanded that Israel ends the war and withdraws its forces before the hostages are released. But Prime Minister Benjamin Netanyahu has rejected such a deal, saying it would amount to a capitulation to "monsters" and mean soldiers had "fallen in vain".
Hamas gunmen took about 250 people hostage and killed 1,300 others when they carried out an unprecedented cross-border attack on southern Israel on 7 October, Israeli authorities say.
At least 25,295 people have been killed in Gaza since the Israeli military launched a large-scale air and ground campaign in response, according to the Hamas-run health ministry. More are believed dead under rubble.
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