One of Gaza's last functioning hospitals has been emptying out in recent days as Israel has ordered the evacuation of nearby areas and signalled a possible ground operation in a town that has been largely spared throughout the war, officials said Monday.

The Al-Aqsa Martyrs Hospital in Deir al-Balah is the main hospital serving central Gaza. The military has not ordered its evacuation, but patients and people sheltering there fear that it may be engulfed in fighting or become the target of an Israeli raid.

Israeli forces have invaded several hospitals over the course of the 10-month-old war, accusing Hamas of using them for military purposes, allegations denied by Palestinian health officials.

Israeli evacuation orders now cover around 84 per cent of Gaza's territory, according to the United Nations, which estimates that around 90 per cent of Gaza's population of 2.3 million have been forced from their homes.

Many have been displaced multiple times, fleeing with what they can carry. Hundreds of thousands of people have packed into swollen tent camps along the coast where there are few if any public services.

Associated Press reporters saw people fleeing the hospital and surrounding areas on Monday, many of them on foot. Some could be seen pushing patients on stretchers or carrying sick children, while others held bags of clothes, mattresses and blankets. Four schools in the area are also being evacuated.

"Where will we get medicine?" Adliyeh al-Najjar said as she rested outside the hospital gate. “Where will patients like me go?”

Fatimah al-Attar fought back tears as she left the hospital compound heading in the direction of the tent camps. “Our fate is to die,” she said. “There is no place for us to go. There is no safe place.”

Doctors Without Borders, an international charity known by its French acronym MSF, said an explosion around 250 metres from the hospital on Sunday caused panic, accelerating the exodus.

“As a result, MSF is considering whether to suspend wound care for the time being, while trying to maintain life-saving treatment,” it said on the platform X.

The hospital says it was treating over 600 patients before the evacuation orders, which apply to residential areas about a kilometre away. Around 100 patients remain, including seven in intensive care and eight in the children's ward.

The Israeli military said it was operating against Hamas in Deir al-Balah and working to dismantle its remaining infrastructure there. It said the evacuation orders were issued to protect civilians, and did not include nearby hospitals or medical facilities. It said it had also informed Palestinian health officials that the facilities did not need to be evacuated.

The army has excluded hospitals from past evacuation orders, but patients and others have still fled, fearing for their safety.

The war began when Hamas-led militants stormed across the border into Israel on October 7, attacking army bases and farming communities. The attack killed some 1,200 people, mostly civilians, and the militants dragged around 250 people back to Gaza as hostages.

Israel's retaliatory offensive has killed over 40,000 Palestinians, according to Gaza's Health Ministry, and caused heavy destruction across much of the territory. Hamas is still holding around 110 hostages, about a third of whom are believed to be dead, after most of the rest were freed in a cease-fire last year.

Israel has continued carrying out strikes across Gaza as the United States, Egypt and Qatar have tried to broker a lasting cease-fire and the release of the remaining hostages. Major gaps remain despite several months of high-level negotiations.

Hospitals have repeatedly been turned into battlegrounds, both literally and in the rival narratives surrounding the war.

Israel says Hamas and other militants hide inside hospitals, which have also served as shelters for thousands of displaced people, and use them for military purposes. The army has raided a number of medical facilities since the start of the war and has provided some evidence that militants were inside some of them. Medical staff deny the allegations and accuse the army of reckless disregard for civilians.

Hospitals can lose their protected status under international law if they are used for military purposes, but any operations against them must be proportional and seek to spare civilians.

Only 16 of Gaza's 36 hospitals are even partially functioning, according to the World Health Organisation, even as they treat casualties from daily Israeli airstrikes across the territory. The difficulty of importing and distributing humanitarian aid in Gaza has contributed to widespread hunger and disease outbreaks, further stressing the health sector.