Fighting for third day in northern Gaza as thousands displaced

Explosions, air strikes and gunfire rattled northern Gaza on Saturday, the third day of an Israeli military operation that has uprooted tens of thousands of Palestinians and compounded what the United Nations (UN) called "unbearable" living conditions in the territory.

The armed wings of both Hamas and the Palestinian group Islamic Jihad said they were engaged in ongoing fighting with Israeli forces there.

Israel's military, meanwhile, said its operations were continuing in Shujaiya where fighting "above and below the ground" left a "large number" of militants dead. A resurgence of fighting in the area comes months after Israel declared the command structure of Hamas fighters dismantled in northern Gaza.

The Israel-Hamas conflict has also led to soaring tensions on Israel's northern border with Lebanon, leading Iran on Saturday to warn of an "obliterating" war if Israel attacked Lebanon.

Further south, in the Rafah area, witnesses reported dead and wounded people after a new Israeli incursion.

Tarek Qandeel, director of the medical center in Al-Maghazi, central Gaza, said it was seriously damaged when a neighboring house was bombed, making it the latest Gaza medical facility affected by the conflict.

The United Nations, in a report on Friday citing Gaza's Health Ministry, said "about 70 per cent of health infrastructure has been destroyed."

Separately, a UN spokeswoman, Louise Wateridge, said by video link she had just returned to central Gaza after four weeks outside the territory.

"It's really unbearable," she said, describing a "significantly deteriorated" situation.

"There's no water there, there's no sanitation, there's no food," and people are returning to live in "empty shells" of buildings.

Meanwhile, Osama Hamdan, a senior Hamas official, said on Saturday there has been no progress in ceasefire talks with Israel over the Israel-Hamas conflict.

The Palestinian group is still ready to "deal positively" with any ceasefire proposal that ends the deadly fighting, Hamdan told a news conference in Beirut. Hamas politburo chief Ismail Haniyeh on Saturday discussed with Egyptian intelligence chief Abbas Kamel the course of ongoing negotiations to achieve a ceasefire in the Gaza Strip.

The call came after Israel's Hebrew public radio Kan reported that the U.S. administration presented a revised version of a prisoner exchange deal that includes a ceasefire between Israel and Hamas.

The new offer is based on the proposal approved by the then-Israeli war cabinet and presented by U.S. President Joe Biden last month, the radio said.

Arab mediators' efforts, backed by the U.S., have so far failed to conclude a ceasefire with both sides blaming each other for the impasse.

(With input from agencies)