Israel says hospitals in the Palestinian enclave, where war has been raging for over five months, are used by Hamas as bases. It has released videos and pictures supporting the claim.
Hamas and medical staff deny the accusations.
The Palestinian Red Crescent said one of its staff was killed when Israeli tanks suddenly pushed back into areas around Al-Amal and Nasser hospitals in the southern city of Khan Younis, amid heavy bombardment and gunfire.
Israeli forces began operating around Al-Amal, the military said, following "precise intelligence ... which indicated that terrorists are using civilian infrastructure for terror activities in the area of Al-Amal."
Israeli armoured forces sealed off Al-Amal Hospital and carried out extensive bulldozing operations in its vicinity, the Red Crescent said in a statement.
"All of our teams are in extreme danger at the moment and are completely immobilised," it said.
The Red Crescent said Israeli forces were now demanding the complete evacuation of staff, patients and displaced people from Al Amal's premises and were firing smoke bombs into the area to force out its occupants.
A displaced Palestinian was killed inside the hospital compound after being hit in the head by Israeli fire, the Red Crescent said in a later update.
The health ministry in Hamas-run Gaza said dozens of patients and medical staffers had been detained by Israeli forces at Al Shifa in Gaza City in the enclave's north that has been under Israeli control for a week.
The Hamas-run government media office said Israeli forces had killed five Palestinian doctors during their seven-day-old swoop on Al Shifa.
The Israeli military did not immediately respond to a request for comment on that report. It said earlier that it had killed over 170 gunmen in the raid, which the Palestinian Health Ministry said had also caused the deaths of five patients.
Al Shifa is one of the few healthcare facilities even partially operational in north Gaza, and - like others - had also been housing some of the nearly 2 million civilians - over 80% of Gaza's population - displaced by the war.
"Right now, Hamas and Islamic Jihad terrorists are barricading themselves inside Shifa hospital wards," said Israeli military spokesperson, Rear Admiral Daniel Hagari.
Hagari said Hamas gunmen were firing at soldiers from inside the emergency and maternity wards of the hospital, and also firing mortars at troops in the hospital, causing damage.
The Hamas-run government media office said they "categorically refute this."
"How can they claim this while their soldiers roam and frolic inside the complex with ease, conducting interrogations with displaced persons, patients, and the wounded," said media office director Ismail Al-Thawabta.
AIR STRIKE KILLS SEVEN IN RAFAH
Reuters has been unable to access Gaza's contested hospital areas and verify accounts by either side.
Khan Younis residents said Israeli forces had also advanced and formed a cordon around Nasser Hospital in the city's west under cover of heavy air and ground fire.
In Rafah, Gaza's southernmost town on the Egyptian border that has become the last refuge for half of Gaza's uprooted population, an Israeli air strike on a house killed seven people, health officials said.
At least 32,226 Palestinians have been killed, among them 84 in the past 24 hours, and 74,518 injured in Israel's air and ground offensive into the densely populated coastal territory since Oct. 7, its health ministry said in a Sunday update.
Israel launched the offensive after Hamas-led Islamist attacked its south on Oct. 7, killing 1,200 people and taking 253 hostages back to Gaza, according to Israeli tallies.
U.S.-backed mediation by Qatar and Egypt has so far failed to secure a Hamas-Israel ceasefire, prisoner releases and unfettered aid to Gaza civilians facing famine, with each side sticking to core demands.
Hamas wants any truce deal to include an Israeli commitment to end the war and withdraw forces from Gaza. Israel has ruled this out, saying it will keep fighting until Hamas is eradicated as a political and military force.
U.N. Secretary-General Antonio Guterres described the backlog of aid destined for Gaza as a moral outrage during a visit to the Egyptian side of the Rafah border crossing on Saturday.
Speaking in Cairo on Sunday, Guterres said the only effective and efficient way to deliver heavy goods to meet Gaza's humanitarian needs was by road.
The United States and other countries have tried using air drops and ships to deliver aid, but U.N. aid officials say deliveries can only be scaled up by land, accusing Israel of impeding relief, which Israel denies.
