Palestinians visit the graves of people killed in an Israeli bombardment of the Gaza Strip and buried inside the Shifa Hospital grounds in Gaza City, on Sunday, Dec. 31, 2023.

Palestinians visit the graves of people killed in an Israeli bombardment of the Gaza Strip and buried inside the Shifa Hospital grounds in Gaza City, on Sunday, Dec. 31, 2023. / AP

Updated December 31, 2023 at 2:08 PM ET

DEIR AL-BALAH, Gaza Strip — Israeli strikes in central Gaza killed at least 35 people Sunday, hospital officials said, as fighting raged across the tiny enclave a day after Israel's prime minister said the war will continue for "many more months," resisting international calls for a cease-fire.

The military said Israeli forces were operating in Gaza's second-largest city, Khan Younis, and residents reported strikes in the central region, the latest focus of the nearly three-month air and ground war that has raised fears of a regional conflagration.

The U.S. military said Sunday that its forces killed several Iran-backed Houthi rebels when they tried to attack a cargo ship in the Red Sea, an escalation in a maritime conflict linked to the war in Gaza. And an Israeli Cabinet minister suggested encouraging Gaza's population to emigrate in remarks that could worsen tensions with Egypt and other friendly Arab states.

Israel says it wants to destroy Hamas' governing and military capabilities in Gaza, from where it launched its Oct. 7 attack on southern Israel. The militants killed some 1,200 people and took about 240 others hostage that day after breaking through Israel's extensive border defenses, shattering its sense of security.

Israel's unprecedented air and ground offensive has killed more than 21,800 Palestinians and wounded more than 56,000 others, according to the Health Ministry in Hamas-ruled Gaza, which does not distinguish between civilian and combatant deaths.

The war has sparked a humanitarian crisis, with a quarter of Gaza residents facing starvation, according to the United Nations. Israel's bombardments have leveled vast swaths of the territory, displacing some 85% of Gaza's 2.3 million residents.

Israel's offensive into Gaza grinds on

Israel expanded its offensive to central Gaza this week, targeting a belt of dense, built-up communities that house refugees from the 1948 war surrounding Israel's creation and their descendants.

In the area of Zweida in central Gaza, an Israeli airstrike killed at least 13 people and wounded dozens of others, according to witnesses. The bodies were draped in white plastic and laid out in front of a hospital, where prayers were held before burial.

"They were innocent people," said Hussein Siam, whose relatives were among the dead. "Israeli warplanes bombarded the whole family."

Officials from Al-Aqsa Hospital in central Deir al-Balah said the 13 were among 35 bodies received on Sunday.

The Israeli military said it was battling militants in Khan Younis, where Israel believes Hamas leaders are hiding. It also said its forces operating in the urban Shati refugee camp, in northern Gaza, found a bomb in a kindergarten and defused it. Hamas continued to launch rockets toward southern Israel.

Israel has faced stiff resistance from Hamas since it began its ground offensive in late October, and the military says 172 soldiers have been killed during that time.

Israeli minister urges a mass migration from Gaza

The fighting has pushed much of the population south, where people have flooded shelters and tent camps near the border with Egypt, even as Israel has also struck those areas.

The scale of the destruction and the exodus to the south has raised fears among Palestinians and Arab countries that Israel plans to drive Gaza's population out and prevent it from returning.

On Sunday, Israel's far-right finance minister said it should "encourage migration" from Gaza and re-establish Jewish settlements in the territory, from which it withdrew settlers and soldiers in 2005.

"If in Gaza there were only 100,000 or 200,000 Arabs and not 2 million, the entire discussion about 'the day after' would be completely different," Finance Minister Bezalel Smotrich told Army Radio.

Smotrich has been largely sidelined by a War Cabinet that does not include him. But his comments risked worsening tensions with neighboring Egypt, which is deeply concerned about a possible mass influx of Palestinian refugees, as well as other friendly Arab countries.

International divisions over postwar plans

Israel is also at odds with the United States, which has provided crucial military aid for the offensive, over Gaza's future.

Israeli Prime Minister Benjamin Netanyahu has said Israel must maintain open-ended security control over the Gaza Strip. At a news conference Saturday, he said the war would continue for "many more months" and that Israel would assume control of the Gaza side of the border with Egypt.

Israel says Hamas has smuggled weapons from Egypt, but Egypt is likely to oppose any Israeli military presence there.

Netanyahu has also said he won't allow the internationally-backed Palestinian Authority, which administers some parts of the occupied West Bank, to expand its limited rule to Gaza, from where Hamas drove its forces out in 2007.

The U.S. wants a unified Palestinian government to run both Gaza and parts of the Israeli-occupied West Bank as a precursor to eventual statehood. The last Israeli-Palestinian peace talks broke down over a decade ago, and Israeli governments since then have been staunchly opposed to Palestinian statehood.

Thousands of Israelis protest against Netanyahu

Israelis, still largely united behind the war's goals, are showing signs they are losing patience.

On Saturday night, thousands took part in one of the largest demonstrations against Netanyahu since the war began. The country is still sharply divided over the long-serving leader and a judicial overhaul plan he set in motion before the war.

"Prime Minister Netanyahu and his continued rule is the most significant existential threat to our country and our society," said protester Gal Tzur.

A separate protest Saturday called for the release of the estimated 129 remaining hostages held by Hamas. Families of hostages and their supporters have demanded that the government prioritize hostage releases over other war objectives, and have staged large protests every weekend.

Egypt, one of the mediators between Israel and Hamas, has proposed a multistage plan that would kick off with a swap of hostages for prisoners, accompanied by a temporary cease-fire. A similar deal in November saw Hamas free over 100 hostages and Israel release 240 Palestinian prisoners.

But the sides still appear far from striking a new deal. Both Hamas and the smaller Islamic Jihad militant group say no more hostages will be freed until Israel ends the offensive and withdraws from Gaza.

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Tags: Benjamin Netanyahu  Hamas  Israel  Gaza  Series: Middle East crisis — explained