Israel's defense minister has said its forces are 'tightening the siege' around Gaza City by extending a military corridor across the territory towards the coast.

Israel Katz also issued a final warning to the hundreds of thousands of Palestinians in the city to evacuate southwards, saying those who remained during the offensive against Hamas would be 'terrorists and supporters of terror'.

Hospitals reported that 45 people had been killed by Israeli fire in Gaza City on Wednesday, while the International Committee of the Red Cross (ICRC) said it had been forced to suspend operations there.

Israel is stepping up the assault as Hamas weighs its response to a new US plan to end the war.

Arab and Turkish mediators are understood to be pressing for a positive response, but a senior Hamas figure has said the armed group is likely to reject it.

The Israel Defense Forces (IDF) has described Gaza City as Hamas's 'last stronghold'. It has said the offensive aims to secure the release of the 48 hostages still held by Hamas - 20 of whom are believed to be alive - and ensure the group's 'decisive defeat'.

Israel's defense minister told Israeli media on Wednesday that the IDF was 'currently completing the capture of the Netzarim corridor to the western coast of Gaza' - a reference to the Israeli military zone that runs east-west from the perimeter with Israel.

Katz warned that this was the 'last chance for Gaza [City] residents who are interested in moving south and leaving Hamas terrorists isolated in Gaza City itself in the face of IDF activity that continues at full strength'.

Those who remain in Gaza will be terrorists and terror supporters,' he warned.

The ICRC's warning came in a statement announcing that the intensification of military operations had forced it to suspend operations at its office in Gaza City, where it said civilians were 'being killed, forcibly displaced and made to endure dire conditions'.

Medics said 29 of those killed in Gaza City on Wednesday were brought to al-Ahli hospital, in the southern Zeitoun neighbourhood.

A video filmed overnight appeared to show four severely injured men wearing high-visibility jackets receiving treatment inside a tent there.

The Hamas-run Civil Defence agency alleged that a team of its paramedics and firefighters were 'directly targeted' by an Israeli strike as they responded to a strike on nearby al-Falah school, which was being used as a shelter for displaced families.

Palestinian media reported that six people were killed in the initial strike on the school.

Meanwhile, Israel's government has approved plans for the Gaza City offensive following the breakdown of indirect talks with Hamas on a previous US proposal for a deal that would have seen about half of the hostages released during a 60-day ceasefire.

The new 20-point peace plan unveiled by President Donald Trump includes an immediate end to the war, the release of all the hostages within 72 hours, disarmament of Hamas, and a gradual Israeli troop withdrawal.

However, a senior Hamas figure told the BBC that this plan served 'Israel's interests' and that the group was likely to reject it.