Smoke rises from the Al-Ghefari tower after it was hit by Israeli air strikes. (Photo:REUTERS)

An Israel Defense Forces official said ground troops were moving deeper into the city, towards its centre, and that the number of soldiers would rise in coming days to confront up to 3,000 Hamas combatants the IDF believes are still in the city.

Gaza health officials reported at least 40 people killed, most of them in Gaza City, in the early hours of the assault, as air strikes swept across the city and tank incursions were reported by residents in several areas.

Hamas says it would free all hostages as part of a permanent ceasefire that would see Israeli forces pull out of Gaza, but has vowed not to disarm until a Palestinian state is established, a goal Israel is determined to thwart.