Israeli forces have laid waste to much of Gaza and seized most of the Palestinian territory.

Israeli tanks backed by warplanes and drones advanced deeper into the western part of the Gaza Strip city of Rafah on Wednesday, killing eight people, according to residents and Palestinian medics.

Residents said the tanks moved into five neighbourhoods after midnight. Heavy shelling and gunfire hit the tents of displaced families in the Al-Mawasi area, further to the west of the coastal enclave, they said.

Some eight months into the war, there has been no sign of let up in the fighting as efforts by international mediators, backed by the United States, have failed to persuade Israel and Hamas to agree to a ceasefire.

Twelve Palestinians were also killed in an Israeli strike that hit a group of citizens and merchants in the south of the Gaza Strip, medical sources told Reuters on Wednesday.

The people were hit as they waited for convoys of aid trucks carrying goods through the Kerem Shalom crossing in Salahuddin Road northeast of Rafah, the sources added.

Israeli forces have laid waste to much of Gaza and seized most of the Palestinian territory but have yet to achieve Israel's stated goal of wiping out Hamas and freeing Israeli hostages.

Residents said Israeli army forces blew up several homes in western Rafah .

Medics and Hamas media said eight Palestinians were killed in Al-Mawasi and many families fled north in panic. They did not identify the fatalities, and the Israeli military said it was looking into the report.

Residents said Israeli army forces blew up several homes in western Rafah, which had sheltered over half of Gaza's 2.3 million people before last month, when Israel began its ground offensive and forced most of the population to head northwards.

Some United Nations and Palestinian figures put those who remained at under 100,000 people.

"Another night of horror in Rafah. They opened fire from planes, drones and tanks on the western areas to cover for their invasion," said one Rafah resident, who asked not to be named.

"Bullets and shells landed in the Mawasi area near where people slept, killing and wounding many," he told Reuters via a chat app.

Reuters