An airstrike on Gaza City killed at least 12 people as the conflict entered a new phase with an Israeli offensive to rid the city of Hamas and free hostages.

Israel's military pounded Gaza City on Wednesday prior to a planned takeover, with another 123 people killed in the last day according to the Gaza health ministry, while militant group Hamas held further talks with Egyptian mediators.

Israel's war cabinet voted on Monday to occupy Gaza City, a move condemned at an emergency meeting of the UN Security Council later that day. On Tuesday the Israel Defense Forces (IDF) said it was "at the beginning of a new state of combat".