Palestinians rush to buy food as Israel readies possible invasion

Palestinians have lined up outside bakeries and grocery stores in Gaza on after spending the night surrounded by the ruins of pulverised neighbourhoods darkened by a near-total power outage.

Israel launched new airstrikes and said it was preparing for a possible ground invasion.

International aid groups warned the death toll in Gaza could mount after Israel stopped all deliveries of food, water, fuel and electricity to the tiny enclave while its crossing with Egypt is unusable.

The war — which was ignited by a bloody and wide-ranging assault on Israel by Hamas militants — has already claimed at least 2600 lives on both sides.

Lieutenant Colonel Richard Hecht, an Israeli military spokesman, told reporters on Thursday that forces "are preparing for a ground manoeuvre" should political leaders order one.

A ground offensive in Gaza, whose 2.3 million residents are densely packed into a sliver of land only 40 kilometres long, would likely bring even higher casualties on both sides in brutal house-to-house fighting.

As Israel pounds Gaza from the air, Hamas fighters have fired thousands of rockets into Israel since their weekend assault.

Militants in the territory are also holding an estimated 150 people taken hostage from Israel.

Palestinians fleeing airstrikes could be seen running through the streets, carrying their belongings and looking for a safe place. Tens of thousands have crowded into UN-run schools while others are staying with relatives or even strangers who let them in.

Lines formed outside bakeries and grocery stores during the few hours they dared open, as people tried to stock up on food before shelves are emptied.

On Wednesday, Gaza's only power station ran out of fuel and shut down, leaving only lights powered by scattered private generators.

A senior official with the the International Committee of the Red Cross warned that the lack of electricity could cripple hospitals.

"As Gaza loses power, hospitals lose power, putting newborns in incubators and elderly patients on oxygen at risk. Kidney dialysis stops, and X-rays can't be taken," said Fabrizio Carboni, ICRC's regional director.

"Without electricity, hospitals risk turning into morgues."

Israeli Energy Minister Israel Katz said nothing would be allowed into Gaza until the captives were released.

"Not a single electricity switch will be flipped on, not a single faucet will be turned on, and not a single fuel truck will enter until the Israeli hostages are returned home," he tweeted.

After Hamas militants stormed into Israel on Saturday and massacred hundreds of people in their homes, on the streets and at an outdoor music festival, Israeli Prime Minister Benjamin Netanyahu vowed to "crush" the group, which has governed Gaza since 2007.

A new war cabinet, which includes a longtime opposition politician, is now overseeing the fight.

The Israeli government is under intense public pressure to topple Hamas rather than continuing to try to bottle it up in Gaza after four previous conflicts ended with the group still firmly in charge of the territory.

Israel has mobilised 360,000 reservists, massed additional forces near Gaza and evacuated tens of thousands of residents from nearby communities.

The US has pledged unwavering support, and Secretary of State Antony Blinken arrived in Tel Aviv on Thursday to meet with Israeli leaders.

He plans to meet on Friday with Palestinian President Mahmoud Abbas, whose authority is confined to the occupied West Bank, and Jordan's King Abdullah II.

"You may be strong enough on your own to defend yourselves, but as long as America exists you will never have to," Blinken said after meeting with Netanyahu.

"We will always be there by your side."

Israel captured the West Bank, along with Gaza and east Jerusalem, in a 1967 war. The Palestinians want all three territories for their future state, but there have been no peace talks in over a decade.

In Gaza, the Israeli military said overnight strikes targeted Hamas' elite Nukhba forces, including command centres used by the fighters who attacked Israel on Saturday, and the home of a senior Hamas naval operative that it said was used to store unspecified weapons.

Other airstrikes killed commanders from two smaller militant groups, according to media linked to those organisations.

"Right now we are focused on taking out their senior leadership," Hecht, the military spokesman, said of Hamas.

"Not only the military leadership, but also the governmental leadership, all the way up to (top Hamas leader Yehia) Sinwar."

Drone footage filmed by The Associated Press revealed extensive damage at the Shati refugee camp, in the north of Gaza, following overnight airstrikes. Residents picked their way through the rubble as fire and rescue crews looked for survivors.

While Israel has insisted that it is giving notice of its strikes, it is employing a new tactic of levelling whole neighbourhoods, rather than just individual buildings. And Israeli military briefings have emphasised the destruction wrought.

Hecht said Israel was not "doing carpet bombing, though some people would like to see that". He said targeting decisions were based on intelligence and civilians were warned.

Even with the warnings, Palestinians say some are unable to escape or have nowhere to go, and that entire families have been crushed under rubble.

Other times, strikes come with no notice, survivors say.

"There was no warning or anything," said Hashem Abu Manea, 58, who lost his 15-year-old daughter, Joanna, when a strike late Tuesday levelled his home in Gaza City.

Meanwhile, the Palestinian Health Ministry said two Palestinians were killed in the West Bank on Thursday when Israeli settlers sprayed bullets at a funeral for three people killed in a settler rampage the day before.

Footage showed Jewish settlers in their cars swerving into the funeral procession and cutting off the road before stopping and opening fire.

Grief and demands for vengeance against Hamas are running high in Israel since Saturday's assault. Netanyahu alleged atrocities, including binding boys and girls and shooting them in the head, burning people alive, raping women and beheading soldiers. The prime minister's allegations could not be independently confirmed.

Armed settlers have rampaged through West Bank villages and hurled stones at passing Palestinian cars, residents say. The Health Ministry says 28 Palestinians have been killed in the West Bank and two in Israeli-annexed east Jerusalem since Saturday.

The UN said late Wednesday the number of people displaced by the airstrikes had soared 30 per cent within 24 hours, to 339,000, two-thirds of them crowding into UN schools. Others sought shelter in the shrinking number of safe neighbourhoods.

The UN humanitarian office said Israeli strikes have levelled 1000 homes since Saturday, with another 560 housing units rendered uninhabitable. It said an Israeli cutoff has resulted in dire water shortages for over 650,000 people. Sewage systems have been destroyed, sending fetid wastewater into the streets.

Egypt's Foreign Ministry said it has not officially closed the Rafah crossing but that Israeli airstrikes have prevented it from operating. Egypt has engaged in intensive talks with Israel and the United States to allow the delivery of aid and fuel through Rafah, the only Gaza crossing not controlled by Israel.

But it has pushed back against proposals to establish corridors out of the territory, saying an exodus of Palestinians would undermine their hopes of one day establishing an independent state. Egypt is also likely concerned about a potential influx of hundreds of thousands of displaced people.

The death toll in Gaza rose to more than 1,350 killed, the Palestinian health ministry said.

The Israeli military said more than 1,300 people, including 222 soldiers, have been killed in Israel, a staggering toll unseen since the 1973 war with Egypt and Syria that lasted weeks.

Thousands have been wounded on both sides.

Israel says roughly 1500 Hamas militants were killed inside Israel, and that hundreds of the dead inside Gaza are Hamas members.