An airstrike on Gaza City killed at least 12 people as the conflict entered a new phase with an Israeli offensive to rid the city of Hamas and free hostages.

Israel's military pounded Gaza City on Wednesday prior to a planned takeover, with another 123 people killed in the last day according to the Gaza health ministry, while militant group Hamas held further talks with Egyptian mediators.

Gaza City has come under intense air attack, the territory's Hamas-run civil defence agency has said, as Israeli forces prepare to occupy the city. Mahmud Bassal, a spokesman, said the residential areas of Zeitoun and Sabra had for three days been hit by bombs and drone strikes that "cause massive destruction to civilian homes",