Israeli forces pounded areas in northern and southern Gaza on Wednesday after Hamas said it had received and was studying a new proposal for a ceasefire and release of hostages held in the Palestinian enclave.
The proposal, presented to the Palestinian militant group by mediators after talks with Israel, appeared to be the most serious peace initiative for months in the Israel-Hamas war.
World powers hope to prevent a wider conflict, but tensions in the Middle East remained high after Yemen's Iran-aligned Houthi rebels said they would keep attacking U.S. and British warships in the Red Sea in solidarity with Palestinians.
Relations between Tehran and Washington are also tense after the deaths of three U.S. soldiers in a drone strike in Jordan that U.S. officials blame on Iran-backed militants.
Washington has not yet outlined its response, but Iran's Revolutionary Guards said on Wednesday they would respond to any U.S. threat.
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Gaza health authorities said 26,900 Palestinians had been killed - including 150 over the past 24 hours - in the war that was triggered after Hamas fighters stormed from Gaza into Israeli towns on Oct. 7 killing 1,200 and taking 253 hostages.
In the latest fighting, Israel bombarded parts of the city of Khan Younis in southern Gaza, districts of Gaza City in the north, and areas in the Al-Nuseirat refugee camp in central Gaza, residents said.
Witnesses said tanks pummelled areas around Nasser Hospital in Khan Younis, the largest hospital still functioning in southern Gaza
"There's a lot of injuries among the displaced who were in the industrial quarter and some schools," said the Head of the Emergency Unit at Nasser Hospital, Nassim Hassan, "many of the injured left loaded on carts, tuk-tuks, cars or even on foot."
The Red Crescent said on Tuesday Israeli forces had stormed the hospital and asked displaced people and staff to evacuate at gunpoint. An Israeli military spokesperson denied this.
Israel's military said its forces had killed at least 25 Palestinian militants in Gaza in the past 24 hours, and that three Israeli soldiers had been killed in battle. Some 224 Israeli troops have now been killed during the ground offensive
THREE-STAGE TRUCE
A senior Hamas official told Reuters the Gaza ceasefire proposal involved a three-stage truce, during which the group would first release the remaining civilians among hostages it captured on Oct. 7, then soldiers, and finally the bodies of hostages that were killed.
The ceasefire proposal followed talks in Paris involving intelligence chiefs from Israel, the United States and Egypt, with the prime minister of Qatar. Hamas chief Ismail Haniyeh said he was going to Cairo to discuss it.
Much of the densely populated Gaza Strip has been devastated by almost four months of Israeli bombardment, and most of its 2.3 million residents have been uprooted by fighting that international aid agencies say has caused a humanitarian crisis.
Israel says it will not stop fighting until Hamas is eradicated. Hamas says it will release its remaining captives only as part of a wider deal to end the war permanently.
REGIONAL TENSIONS
The U.S. and Britain have carried out strikes on Houthi targets in Yemen over the group's attacks on Red Sea shipping, and returned the militia to a list of terrorist groups.
With tensions also high over Saturday's drone attack on U.S. service members in Jordan, the U.S. says it has decided how to respond but has not said how.
