Gaza - Israel launched strikes on Gaza Sunday after it expanded an evacuation order for Rafah, with the United Nations warning an outright invasion of the crowded southern city risked an "epic" disaster.

Gaza's civil defense agency said two doctors were killed Sunday in the central town of Deir al-Balah, while AFP correspondents reported heavy gunfire from Israeli helicopters near Gaza City.

Witnesses said Israel had carried out strikes in Rafah near the crossing with Egypt on Saturday, and AFP images showed smoke rising over the city.

Israeli troops defied international opposition this week and entered eastern areas of the city, effectively shutting a key aid crossing and suspending traffic through another.

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Israel expanded an evacuation order for eastern Rafah, after saying 300,000 people had fled the city since the army urged people to leave earlier in the week.

Residents piled water tanks, mattresses, and other belongings onto vehicles and prepared to flee again.

"We don't know where to go," said Farid Abu Eida, who was preparing to leave Rafah, having already been displaced there from Gaza City. "There is no place left in Gaza that is safe or not overcrowded... There's nowhere we can go."

Residents were told to go to the "humanitarian zone" of Al-Mawasi, on the coast northwest of Rafah.

Hamas accused Israel of "expanding the incursion into Rafah to include new areas in the center and the west of the city."

Israeli army spokesperson Daniel Hagari claimed "we have eliminated dozens of terrorists in eastern Rafah" and said troops were fighting "armed terrorists" at the crossing and had found "numerous underground tunnel shafts."

UN chief Antonio Guterres said on Friday that Gaza risked an "epic humanitarian disaster" if Israel launched a full-scale ground operation in Rafah.

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EU chief Charles Michel said on social media that Rafah civilians were being ordered to "unsafe zones," denouncing it as "unacceptable."

Doctors Without Borders (MSF) said it had started transferring 22 patients from a field hospital in Rafah, saying Israel's operations in the city were "making it impossible to provide lifesaving medical assistance."

Israel has waged a relentless assault on the people of Gaza since Hamas' October 7 attack, which resulted in the deaths of more than 1,170 people, according to an AFP tally of Israeli official figures. The attack came amid decades of Israeli occupation and apartheid oppression of Palestinians.

During their attack, Hamas militants also seized hostages. Israel estimates 128 of them remain in Gaza, including 36 who the military says are dead.

Israel's retaliatory offensive has killed at least 34,971 people in Gaza, mostly women and children, according to the occupied territory's health ministry.

While mediation efforts towards a truce and hostage release appeared to stall, Hamas' armed wing said a hostage who appeared in a video it released on Saturday had died from wounds suffered in an Israeli strike.

The Ezzedine Al-Qassam Brigades said Nadav Popplewell, a British-Israeli man, had been wounded in a strike a month ago and died "because he did not receive intensive medical care because the enemy has destroyed the Gaza Strip's hospitals."

The Israeli military did not offer any comment on the video, and AFP was unable to independently verify its authenticity.

US President Joe Biden said on Saturday a ceasefire would be achieved "tomorrow" if Hamas released the hostages.

A US State Department report on Friday said it was "reasonable to assess" that Israel had violated norms on international law in its use of weapons from the United States, but did not find enough evidence to block shipments.

The State Department submitted its report two days after Biden publicly threatened to withhold certain bombs and artillery shells if Israel went ahead with an all-out assault on Rafah, where the UN says 1.4 million have been sheltering.

The Biden administration already paused delivery of 3,500 bombs as Israel appeared ready to invade Rafah, although it recently approved an enormous aid package for Israel and numerous weapons shipments in the past months.

Hamas says Israel's "continued control" and closure of the Rafah crossing exacerbates the "humanitarian catastrophe" in the besieged territory.

Israeli Prime Minister Benjamin Netanyahu has pledged to "eliminate" Hamas battalions in Rafah after the army in January said it had dismantled the militant group's command structure in northern Gaza.

The Israeli army said it had reopened the Kerem Shalom crossing near Rafah on Wednesday, but aid agencies cautioned that getting assistance through the militarized area remained extremely difficult.