Israeli Prime Minister Benjamin Netanyahu has ordered the military to prepare to evacuate civilians from the southern Gazan city of Rafah ahead of an expanded offensive against Hamas.
Some 1.5 million Palestinians are in Rafah to seek refuge from Israeli combat operations in the rest of Gaza.
It comes a day after the US warned Israel that an unplanned invasion of Rafah would be a "disaster".
Aid groups say it is not possible to evacuate everyone from the city.
Mr Netanyahu told military and security officials to "submit to the cabinet a combined plan for evacuating the population and destroying the battalions" of Hamas, his office said on Friday.
"It is impossible to achieve the goal of the war without eliminating Hamas, and by leaving four Hamas battalions in Rafah. On the contrary, it is clear that intense activity in Rafah requires that civilians evacuate the areas of combat," the statement added.
Earlier this week, Mr Netanyahu said he had ordered troops to "prepare to operate" in Rafah and that "total victory" by Israel over Hamas was just months away.
He made the comments while rejecting Hamas's latest proposed ceasefire terms.
Most of the people in Rafah have been displaced by fighting in other parts of Gaza and are living in tents.
Expanding the conflict into Rafah would "exponentially increase what is already a humanitarian nightmare" in the city, UN Secretary-General Antonio Guterres warned.
While the head of the UN agency for Palestinian refugees, UNRWA, said there was "a sense of growing anxiety and growing panic in Rafah".
"People have absolutely no idea where to go after Rafah," Philippe Lazzarini told reporters in Jerusalem.
"Any large-scale military operation among this population can only lead to an additional layer of endless tragedy that's unfolding."
Reported Israeli air strikes on Gaza on Friday killed at least 15 people including eight in Rafah, officials from the Hamas-run health ministry said. Israel did not immediately comment.
Garda al-Kourd, a mother-of-two who said she had been displaced six times during the war, said she was expecting an Israeli assault but hoped there would be a ceasefire agreement before it happened.
"If they come to Rafah, it will be the end for us, like we are waiting for death. We have no other place to go," she told the BBC from a relative's house in the city where she was living with 20 other people.
Speaking on Thursday evening, and without referring to Rafah, US President Joe Biden said Israel's actions in Gaza had been "over the top".
Earlier, US National Security Council spokesman John Kirby said the Israeli military had a "special obligation as they conduct operations there or anywhere else to make sure that they're factoring in protection for innocent civilian life".
"Military operations right now would be a disaster for those people and it's not something that we would support," he said.
Around 1,200 people were killed during the Hamas attacks on southern Israel on 7 October, according to Israeli officials.
More than 27,900 Palestinians have been killed and at least 67,000 injured by the war launched by Israel in response, according to the Hamas-run health ministry.