Israel pounded south and central Gaza on Friday as Egypt was to host a high-level Hamas delegation for talks to try and end the nearly 12-week war that has devastated the besieged Palestinian territory.

The Israeli military said its forces "are extending operation in Khan Yunis" in the coastal territory's south, and had "eliminated dozens of terrorists" across Gaza over the past 24 hours.

AFPTV footage showed smoke billowing over Rafah, near Egypt, following fresh strikes early Friday.

Israeli shelling near Al-Amal in Khan Yunis killed 41 people over the past two days, the Palestinian Red Crescent Society said on Thursday.

The casualties in repeated Israeli strikes near the facility include "displaced persons seeking shelter", it said.

The UN humanitarian office said an estimated 100,000 more displaced people had arrived in the already-teeming southern border city of Rafah in recent days following the intensification of fighting around Deir al-Balah and Khan Yunis.

At Al-Aqsa hospital in Deir al-Balah, Palestinians gathered to identify loved ones killed in strikes.

Suhair Nasser was holding the bodies of her twin children, who she said in tears were killed in Israeli bombardment on Thursday.

"The house was bombed and the debris fell on the kids on December 28 — their birthday."

The fighting left much of Gaza's north in ruins, while the battlefront has shifted ever further to the south and raised tensions across the Middle East.

Israel has vowed to destroy Hamas — dubbed a "terrorist" group by the United States and European Union — in retaliation for the October 7 attack which left about 1,140 people dead, mostly civilians, according to an AFP tally based on Israeli figures.

Around 250 hostages were also taken during the attack, more than half of whom remain captive.

Israel's relentless aerial bombardment and ground invasion in Gaza have killed at least 21,507 people, mostly women and children, according to the health ministry in Hamas-ruled Gaza.

The figure includes 187 fatalities over the past 24 hours, a ministry statement said.

The Israeli army says 168 of its soldiers have been killed inside Gaza.

Sources close to Hamas say Egypt's three-stage plan provides for renewable ceasefires, a staggered release of hostages in exchange for Palestinian prisoners in Israel, and ultimately an end to the war.

Little food, 'really expensive'

Hamas's military wing, Ezzedine al-Qassam Brigades, said Friday it launched a fresh barrage of rockets at southern Israel.

Israel has repeatedly said that one of the chief goals of the war is the return of the 129 hostages it says remain in Gaza.

On Thursday, an Israeli kibbutz community said one of its residents, US-Israeli Judith Weinstein Haggai, 70, who was thought to be the oldest woman held captive had in fact died in the October 7 attack and her body held by militants.

US President Joe Biden said he was "devastated" by the news.

The UN says more than 80 percent of Gaza's 2.4 million people have been driven from their homes. Many now live in cramped shelters in the tiny territory or in makeshift tents around Rafah.

The UN agency for Palestinian refugees, UNRWA, said 308 people seeking shelter in their facilities have been killed during the war.

Residents in Rafah combed through rubble for survivors on Thursday after an air strike that one witness said left "several casualties". 

Tayseer Abu al-Eish said he was at home when "all of a sudden we heard a loud explosion and debris started falling on us. The apartment was completely destroyed and my daughters were screaming".

An Israeli siege imposed after October 7, following years of crippling blockade, has deprived Gazans of food, water, fuel and medicine.

A UN aid convoy on Thursday came under fire by the Israeli military without causing casualties, UNRWA said.

The severe shortages have been only sporadically eased by humanitarian aid convoys entering primarily via Egypt.

Rafah residents and displaced people thronged a Rafah market on Friday morning to buy food, including fresh fruit, eggs and meat, trucked in the previous night from Egypt.

"This is the first time eggs and some types of fruit have entered Gaza from Egypt," said vendor Muntasser al-Shaer.

"All types of fruit are missing in the markets, there are some types of vegetables but they're really expensive," he added.

Aiming for 'complete withdrawal'

UN humanitarian chief Martin Griffiths described on social media what he called "an impossible situation for the people of Gaza, and for those trying to help them". 

"You think getting aid into Gaza is easy? Think again," he wrote Friday on X. 

A Hamas official, speaking on condition of anonymity, told AFP the delegation in Cairo would "give the response of the Palestinian factions, including several observations" regarding the Egyptian proposal, recently put to officials from Hamas and another Gaza armed group, Islamic Jihad.

Hamas would also seek "guarantees for a complete Israeli military withdrawal" from Gaza, the official said.

The proposal provides for a Palestinian government of technocrats after talks involving "all Palestinian factions", which would be responsible for governing and rebuilding in post-war Gaza.

Egypt's State Information Services chief Dia Rashwan said the plan was "intended to bring together the views of all parties concerned, with the aim of ending the shedding of Palestinian blood".

In Tel Aviv, hundreds rallied Thursday calling for a ceasefire.

"Israelis, Palestinians, Muslims, Jews, Christians — this is everybody's home," said teacher Itay Eyal, 51, adding that everyone was entitled to live with "freedom and dignity".

The bloodiest ever Gaza war has also sharply heightened tensions between Israel and its long-time arch foe Iran, which supports armed groups across the Middle East.

Israel has traded heavy cross-border fire with Iran-backed Hezbollah since the Gaza war erupted, and on Friday said its military had struck "Hezbollah infrastructure in southern Lebanon" after reporting rocket fire from there.

Later on Friday, the army said sirens warning of incoming fire blared in Israel's north.