US President Joe Biden stressed the "critical need" to protect civilians, in a call with Prime Minister Benjamin Netanyahu, who vowed Israel would "continue the war until all of its goals have been achieved", according to official statements.
As heavy fighting raged on, the Israeli army said it had struck another 200 targets in the past 24 hours in the narrow Palestinian territory, where it is seeking to defeat Hamas and free hostages.
The army said 153 troops had died in Gaza since it launched its ground invasion on October 27. Ten soldiers were killed in battles on Saturday, one of the deadliest days for the Israeli side.
"This is a difficult morning, after a very difficult day of fighting in Gaza," said Netanyahu on Sunday. "The war is exacting a very heavy price... but we have no choice but to keep fighting."
The army said soldiers had raided a northern Gaza compound near schools, a mosque and a clinic and found "explosive belts adapted for children, dozens of mortar shells, hundreds of grenades and intelligence documents".
Hamas rejected the Israeli claims, saying they are meant "to justify their massacring of innocent civilians and their destructive aggression".
The bloodiest ever Gaza war broke out when Hamas attacked southern Israel on October 7 and its Islamist militants killed about 1,140 people, mostly civilians, according to an AFP tally based on Israeli figures.
Israel's withering military campaign, including massive aerial bombardment, has killed 20,424 people, mostly women and children, according to the Hamas-run territory's health ministry.
Vast areas of Gaza lie in ruins and its 2.4 million people have endured dire shortages of water, food, fuel and medicine due to an Israeli siege, alleviated only by the limited arrival of aid trucks.
Eighty percent of Gazans have been displaced, according to the UN, many fleeing south and now shielding against the winter cold in makeshift tents.
Near the far southern Gaza city of Rafah, Umm Amir Abu al-Awf, 27, suffered wounds to her hand and legs in a strike on her house early Sunday.
"Who won?" she said. "Nothing has been achieved except killing civilians... They keep saying Rafah is safe. It is not safe. Nowhere is safe. Every house has a martyr and injured."
'More hatred, less peace'
Israeli military spokesman Jonathan Conricus indicated that forces were close to gaining control in northern Gaza and that now "we focus our efforts against Hamas in southern Gaza".
Fighting has raged in the main southern city of Khan Yunis, the birthplace of Yahya Sinwar, Hamas's leader in Gaza and the man Israel holds most responsible for the October 7 attack.
Elsewhere, Palestinian rescuers scrambled again to pull survivors and bodies from the rubble of a destroyed residential building, after a strike hit in the central city of Deir al-Balah.
"I was praying when a huge explosion occurred," said Yazan Moqbel, a wounded man whose sister was still under the broken concrete. "Rubble fell on us. I didn't know what happened."
The head of the UN refugee agency, Filippo Grandi, urged an end to the suffering in the third month of the war.
"For aid to reach people in need, hostages to be released, more displacement to be avoided and above all stop the appalling loss of lives, a humanitarian ceasefire in Gaza is the only way forward," he wrote on X, formerly Twitter.
"War defies logic and humanity, and prepares a future of more hatred and less peace."
And World Health Organization chief Tedros Adhanom Ghebreyesus similarly renewed calls for a ceasefire, saying: "The decimation of the Gaza health system is a tragedy."
On Friday, the United States allowed the passage of a UN Security Council resolution that effectively called on Israel to allow "immediate, safe and unhindered" deliveries of life-saving aid to Gaza "at scale".
World powers had wrangled for days over the wording and, at Washington's insistence, toned down some provisions -- including removing a call for a ceasefire.
Separately, a leading member of Islamic Jihad -- which has been fighting alongside Hamas -- said the group's chief Ziad Nakhaleh arrived in Cairo for talks on a truce and hostage exchange, after the Hamas chief visited last week.
Muted holiday
As the war rages on, Christians around the world celebrate Christmas Eve, and festivities are usually held in the occupied West Bank city of Bethlehem where they believe Jesus was born.
But this year the city is almost deserted, with few worshippers around and no Christmas tree erected, after church leaders decided to forego "any unnecessarily festive" celebrations, in solidarity with Gazans.
The Latin patriarch of Jerusalem, Pierbattista Pizzaballa, arrived Sunday at the Church of the Nativity, clad in the traditional black and white keffiyeh.
"Our heart goes to Gaza, to all people in Gaza but a special attention to our Christian community in Gaza who is suffering," he said.
"We are here to pray and to ask not only for a ceasefire, a ceasefire is not enough, we have to stop these hostilities and to turn the page because violence generates only violence."
Palestinian president Mahmud Abbas voiced hope Christmas would mark "a cessation of the Israeli war against the Palestinian people in Gaza, as well as across the occupied Palestinian territories".
The Gaza war has heightened tensions across the Middle East. Cross-border fire has erupted almost daily between Israel and Lebanon's powerful Hezbollah movement.
And Yemen's Huthi rebels have fired at cargo vessels in the Red Sea, leading the United States to build a naval taskforce to deter the missile and drone strikes.
The US military said four drones had targeted the USS Laboon, but had been shot down, and that an Indian-flagged tanker was hit and sent out a distress call.
Iran's deputy foreign minister, Ali Bagheri, denied the Islamic republic was orchestrating the campaign, saying the Huthis act on their "own decisions and capabilities".
British Foreign Secretary David Cameron, in an interview published Sunday, branded Iran "a thoroughly malign influence in the region and in the world".
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