Apache helicopters and Israeli quadcopter drones flew above Gaza City's Shujaiya district as heavy gunfire echoed through the streets, said AFP reporters.
Prime Minister Benjamin Netanyahu rejected a US media report saying his generals were urging a Gaza truce even with Hamas undefeated, stressing on Tuesday that "this will not happen".
Military chief Herzi Halevi meanwhile said Israel is engaged in "a long campaign" to destroy Hamas over the October 7 attack and to bring home the hostages held by Palestinian militants.
The United Nations warned that the almost nine-months-old war had "unleashed a maelstrom of human misery" and that the latest evacuation order had plunged yet more Palestinians into "an abyss of suffering".
Ten days after Netanyahu said the war's "intense phase" was winding down, the Israeli military again rained down air strikes and artillery fire on militants in the Shujaiya district.
The air force struck "over 50 terror infrastructure sites" across Gaza in 24 hours while ground troops "eliminated terrorists", located tunnels and found weapons including AK-47 assault rifles, the military said.
The Israeli army -- which issued an evacuation order for Shujaiya a week ago -- on Sunday did the same for a larger area near Khan Yunis and Rafah in the south, raising fears of renewed heavy battles there.
Tens of thousands of Palestinians have again taken to the road there, many bundling their scant belongings on top of cars or donkey carts as they sought safety elsewhere in the bombed-out wasteland.
'Lives upended'
The UN agency supporting Palestinian refugees, UNRWA, said 250,000 people had been impacted by the latest evacuation order that covers southern areas bordering Israel and Egypt.
UN Secretary-General Antonio Guterres's spokesman Stephane Dujarric said the order covers 117 square kilometres (45 square miles), or "about a third of the Gaza Strip, making it the largest such order since October".
The UN humanitarian coordinator for Gaza, Sigrid Kaag, told the UN Security Council in New York on Tuesday that the war had now displaced 80 percent of Gaza's population.
She also said not enough aid was reaching the besieged territory and that crossings must be reopened, particularly to southern Gaza, to avert a humanitarian disaster.
"Palestinian civilians in Gaza have been plunged into an abyss of suffering, their home lives shattered, their lives upended," she said. "The war has not merely created the most profound of humanitarian crises. It has unleashed a maelstrom of human misery."
Amid the war, siege and mass displacement, more than 150,000 people have contracted skin diseases in the squalid conditions, said the World Health Organization.
Wafaa Elwan, a Palestinian mother of seven who now lives in a tent city by the sea, said: "We sleep on the ground, on sand where worms come out underneath us."
She said her five-year-old son, much of whose body was covered in rashes and welts, "can't sleep through the night because he can't stop scratching his body".
'Winds of defeatism'
The bloodiest ever Gaza war broke out 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 since then has killed at least 37,925 people, also mostly civilians, according to data from the health ministry in the Hamas-run territory.
The Israeli military said Wednesday that "operational activities continue throughout the Gaza Strip".
The Gaza civil defence agency said seven people were killed when a strike hit a family house north of Gaza City.
Another strike killed three people in a car at Al-Maghazi refugee camp in the central Deir al-Balah area, said an AFP reporter.
Air strikes also hit homes in Rafah, according to Gaza's government media office.
The New York Times has quoted Israeli security officials as saying top generals see a truce as the best way to secure the release of the remaining hostages, even if that meant not achieving all of the war goals.
Netanyahu, who heads a government including hardline right-wing parties, strongly rejected this on Tuesday and vowed Israel would not give in to the "winds of defeatism".
"The war will end once Israel achieves all of its objectives, including the destruction of Hamas and the release of all of our hostages," he said.
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