The United Nations estimated that up to 250,000 people are impacted by the Israeli military order for civilians to leave Al-Qarara, Bani Suhaila and other localities near the territory's second city of Khan Yunis.
Thousands spent the night on the streets as many families have moved so many times since the start of the war on October 7 that they have run out of places of refuge.
Midday temperatures rose above 30 degrees Celsius (85 Fahrenheit) and there was no shelter, said Ahmed al-Najjar, a 26-year-old resident of Bani Suhaila, whose family fled on Monday but then decided to return home to brave any new fighting there.
Anxiety skyrocketed after the evacuation order was issued late Monday, he told AFP.
"We did not know where we would go and we do not have enough money to buy a new tent," said Najjar.
"We had to spend the night on the street and that has increased our stress. This morning we decided to go home again. There is nowhere else.
"Whatever happens, happens," he said. "We have nothing to lose now."
Hospital evacuation
The war started after Hamas's October 7 attack on southern Israel resulted in the deaths of 1,195 people, mostly civilians, according to an AFP tally based on Israeli figures.
The militants also seized 251 hostages, 116 of whom remain in Gaza, including 42 the army says are dead.
Israel's retaliatory offensive has killed at least 37,925 people, also mostly civilians, according to data from the health ministry in the Hamas-run territory.
Israel has not specifically said there will be a military operation in southern Gaza, but so far nearly every evacuation order has heralded major battles.
Despite new casualties arriving from air strikes and fighting, the European Gaza hospital started evacuating patients because it is located inside the evacuation zone, a medical source said.
The UN agency for Palestinian refugees, UNRWA, estimates there are 1.7 million displaced across the besieged territory, out of a population of more than two million.
UNRWA estimates there are 250,000 people in the latest zones ordered emptied.
It previously said about one million people had fled the southern city of Rafah ahead of an Israeli operation that began on May 7.
"The vast majority of them were already displaced, some multiple times," said UNRWA spokesperson Juliette Touma.
'Barbaric war'
Amid the latest Gaza mass displacement, Bakri Bakri, 39, lay on the ground among hundreds of people on a scrap of land in Khan Yunis.
"There is no room for us or any of the displaced," he said. "We just hope a solution can be found."
Another Gazan man, Abdullah Muhareb, said his family had already fled their home in the Al-Fokhari district once because of a previous Israeli warning of an impending assault.
"We suffered a lot and lived for a long time in the tent city in Mawasi" on the coast, until the army withdrew from Khan Yunis, said the 25-year-old.
"Then we went home again," he said. "There was a lot of damage because of the bombing, but we arranged it like a home and we could rest.
"But there is no rest in this barbaric war."
He added that "we have left again and we do not know where to go. We went back to our place in Mawasi, but we could not find it as there are so many displaced.
"We slept in the street without shelter, without food, without water. There was bombing around us. We just want this devastation to end, we do not have the energy to endure it anymore."
