Israeli war cabinet member Benny Gantz has warned that if Hamas does not release all hostages held in Gaza by March 10, an attack will be launched on Rafah.
This is the first time that Israel has announced when its forces might enter the crowded city in southern Gaza.
Global opposition to such an attack is growing in Rafah, where about 1.5 million Palestinians live.
Earlier, the United Nations public health agency said that a major hospital in Gaza had stopped operating after an Israeli raid.
The Israel Defense Forces entered the compound on Thursday, saying intelligence indicated that hostages taken by Hamas were being held there.
The Israeli army described its operation in Nasser as “meticulous and limited,” and accused Hamas of “cynically using hospitals for terrorism.”
“The world should know, and Hamas leaders should know — if our hostages do not return to their homes by Ramadan, fighting will continue everywhere, including the Rafah area,” Gantz, the former defense minister, said on Sunday.
Ramadan – the Islamic holy month of fasting – begins this year on March 10.
Gantz added that Israel will work “in a coordinated manner to facilitate the evacuation of civilians in dialogue with our American and Egyptian partners to reduce civilian casualties.”
The Israeli war cabinet consists of the country's top security officials. It was formed several days after Hamas-led militants attacked Israel on October 7, killing at least 1,200 people and taking 253 hostage. Israel believes that Hamas is still holding about 130 hostages in Gaza.
Mr. Gantz's reference to Egypt may heighten speculation that Israel expects some Palestinians to cross the Gaza Strip and seek shelter on the Egyptian side of the border, where authorities appear to be building a large walled fence for this purpose, the prime minister says. BBC diplomatic correspondent Paul Adams.
But he adds that Israeli officials have not yet provided any details about the evacuation plan.
With exactly three weeks to go before the start of Ramadan, reports from Rafah indicate that a few people are leaving, heading west towards the coast, but most are still waiting, unsure of what to do.
Despite international pressure, Israeli Prime Minister Benjamin Netanyahu pledged to launch a ground attack on Rafah to eliminate Hamas militants there.
Egypt and some other Arab countries have repeatedly warned that any Israeli attack in Rafah could push many Palestinians into Egypt – something they consider unacceptable. Saudi Arabia vowed “very serious repercussions” if Rafah was stormed.
At the international level, there were many calls for Israel to refrain from storming Rafah, where Palestinians live in miserable conditions. The Israeli offensive against Hamas since October 7 has reduced much of the Gaza Strip to rubble.
More than 28,400 Palestinians, most of them women and children, have been killed and more than 68,000 others injured since the war began, according to the Hamas-run Health Ministry.
The ministry said that at least 127 Palestinians were martyred and 205 others were injured during the past 24 hours.
Netanyahu said he sent negotiators at the request of US President Joe Biden, but added that they did not return for further discussions because Hamas's demands were “fictitious.”
Hamas accused Israel of not making progress towards reaching a ceasefire agreement.