The World Health Organization (WHO) scrambled to evacuate the last remaining patients and staff from Al-Shifa hospital, describing it as a "death zone" after UN officials visited the facility raided earlier this week by Israeli troops.
Mohammed Zaqut, director general of Gaza's hospitals, told AFP that "all 31 premature babies in Al-Shifa hospital... have been evacuated" along with three doctors and two nurses.
"Preparations are under way" for them to enter Egypt via the Rafah crossing, Zaqut said.
Elsewhere in northern Gaza, a Hamas health official said more than 80 people were killed on Saturday in twin strikes on Jabalia refugee camp, the territory's largest, including on a UN school sheltering displaced people.
Israel has vowed to destroy Gaza's rulers Hamas over the October 7 attacks that it says killed 1,200 people and saw 240 hostages taken, in the worst-ever onslaught on the country.
In Gaza, the Hamas government says 12,300 have been killed in Israel's relentless aerial bombardment and ground operations.
Most of the casualties on both sides are civilians.
Israel said Saturday its military was "expanding its operational activities in additional neighbourhoods... of the Gaza Strip" where the UN says some 1.6 million people have been internally displaced by more than six weeks of fighting.
The fighting has rendered more than half of Gaza's 36 hospitals non-functioning by shortages, combat or damage, the UN has said.
On Sunday, the WHO described dire conditions at Gaza City's Al-Shifa hospital, with a mass grave at the entrance and nearly 300 patients left inside with 25 health workers.
It said it was planning "the immediate evacuation of the remaining patients, staff and their families".
But it warned that nearby facilities were already overstretched and urged an immediate ceasefire given the "extreme suffering of the people of Gaza".
The Israeli army said three soldiers were killed Saturday in fighting in northern Gaza, raising the number of troop deaths there to 62 since the war began.
'Horrifying'
Israel this week showed AK-47 assault rifles and other military equipment it said had been found at Al-Shifa to support its claim -- rejected by Hamas -- that militants had been there.
On Saturday, hundreds fled the hospital on foot as loud explosions were heard around the complex.
Columns of sick and injured were seen leaving with displaced people, doctors and nurses.
At least 15 bodies, some in advanced stages of decomposition, were strewn along the route, an AFP journalist said.
Medical charity Doctors without Borders (MSF) said one person was killed when its convoy came under attack Saturday while evacuating staff and family members from near Al-Shifa.
The WHO said 29 patients at the hospital with serious spinal injuries cannot move without medical assistance.
Israel has told Palestinians to move south for their safety, but deadly strikes continued there too.
At least 26 people were killed in a strike that hit a residential building on Saturday, according to the director of the Nasser hospital in Khan Yunis.
The head of the UN agency for Palestinian refugees UNRWA, Philippe Lazzarini, said he had seen "horrifying images" of Saturday's strike on the UN school in Jabalia, which Egypt called a "war crime".
The Israeli army said "an incident in the Jabalia region" was under review without elaborating.
Fuel shipments
With just a trickle of aid allowed in from Egypt, Israel permitted a first consignment of fuel to enter Gaza late Friday under US pressure, allowing telecommunications to resume after a two-day blackout.
Some 120,000 litres (31,700 gallons) of fuel arrived on Saturday, according to the UN.
Israeli Prime Minister Benjamin Netanyahu, whose government had vowed to keep aid out of Hamas's hands, said the fuel would power basic necessities like water pumps and sewage systems to prevent disease outbreak.
"The humanitarian assistance is also vital to ensure continued international support," he told a news conference.
A US official has said more fuel deliveries and a "significant pause" in fighting would come "when hostages are released".
The White House denied a Washington Post report of a tentative agreement.
But Qatar's Prime Minister Mohammed bin Abdulrahman Al Thani said on Sunday a deal to free hostages hinges on "very minor" practical issues, without elaborating.
'Not normal'
Relatives of some of the hostages on Saturday marched to Netanyahu's Jerusalem office, demanding action to free them.
"It's not normal to have children kidnapped for 43 days. We don't know what the government is doing, we don't have any information," said marcher Ari Levi.
The bodies of two female hostages were recovered in Gaza this week, the Israeli military said, while four abductees have so far been released by Hamas and a fifth rescued by troops.
Gaza's fate after the conflict remains unclear, and US President Joe Biden argued that the coastal territory and the Israeli-occupied West Bank should come under a single "revitalised" administration.
"As we strive for peace, Gaza and the West Bank should be reunited under a single governance structure, ultimately under a revitalised Palestinian Authority," he wrote in the Washington Post.
Netanyahu maintains that the Palestinian Authority "in its current form is not capable of receiving responsibility for Gaza".
Since the Israel-Hamas war began, Israeli troops and settlers have killed more than 200 Palestinians in the West Bank, according to Ramallah-based health ministry.
The Palestinian Red Crescent reported Sunday two deaths in overnight army raids in Jenin and the Bethlehem area.
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