Israel's military said it was ready to evacuate babies from Gaza's largest hospital on Sunday, where Palestinian officials said two newborns died and dozens more were at risk after fuel ran out amid intense fighting in the area.

As the humanitarian situation worsened, Gaza's border authority said the Rafah crossing into Egypt would reopen on Sunday for foreign passport holders. Jordan also air-dropped more aid into a field hospital in the enclave.

Hamas said it had completely or partially destroyed more than 160 Israeli military targets in Gaza, including more than 27 tanks and vehicles in the past 48 hours. An Israeli military spokesperson said Hamas had lost control of northern Gaza.

At a news conference late on Saturday, Israeli Prime Minister Benjamin Netanyahu announced the deaths of five more Israeli soldiers in Gaza. The Israeli military said 46 had been killed since its ground operations there began.

Israel said rockets were still being fired from Gaza into southern Israel, where it has said about 1,200 people were killed and more than 200 taken hostage by Hamas last month.

Palestinian officials said on Friday that 11,078 Gaza residents had been killed in air and artillery strikes since October 7, around 40 per cent of them children.

Israel's three major TV news channels, without citing named sources, said there was some progress toward a deal to free hostages held by Hamas in Gaza.

Netanyahu said he would not discuss details of any possible deal, which according to N12 News would involve 50 to 100 women, children and elderly being released in stages during a three to five day pause in fighting.

According to the reports, Israel would release women and minor Palestinian prisoners and consider letting fuel in to Gaza, while reserving the right to resume fighting.

In Tel Aviv, thousands joined a rally to support families of the hostages.

Gaza residents said Israeli troops, who went to war to eliminate Hamas after its deadly cross-border assault on October 7, had clashed with Hamas gunmen overnight in and around Gaza City where the Al Shifa hospital, Gaza's largest, is located.

Ashraf Al-Qidra, who represents the health ministry in Hamas-controlled Gaza, said the hospital had ceased functioning since Saturday, after it ran out of fuel. He said two babies had died in an incubator as a result.

"We are using all and primitive means to try not to lose more lives," Al-Qidra told Reuters. "But unless a solution is found to provide us with fuel or electricity the patients and injured are at risk of death."

Israel's chief military spokesperson, Rear Admiral Daniel Hagari, said the Israeli military would help evacuate babies from the hospital, at the request of the staff at Al Shifa. Al-Qidra had said there were 45 babies in total.

Asked about the evacuations, Al-Qidra said: "We have not been informed about any mechanism to get the babies out to a safer hospital. So far we are praying for their safety and not to lose more of them."

Earlier, the World Health Organisation expressed "grave concern" for the safety of everyone trapped in the hospital by the fighting and said it had lost communications with its contacts there.

Israel has said doctors, patients and thousands of evacuees who have taken refuge at hospitals in northern Gaza must leave so it can tackle Hamas gunmen who it says have placed command centres under and around them.

Hamas denies using hospitals this way. Medical staff say patients could die if they are moved and Palestinian officials say Israeli fire makes it dangerous for others to leave.

Al Shifa staff told Reuters there had been continuous bombardment for more than 24 hours. Most hospital staff and people sheltering there had left, but 500 patients remained.