Rafah is where more than a million war-displaced Palestinians have been sheltering.

Instructed by Arabic text messages, telephone calls, and flyers to move to what the Israeli military called an "expanded humanitarian zone" 20 kilometre away, some Palestinian families lumbered out under chilly spring rain, witnesses said.

Israel's military said it had begun encouraging residents of Rafah to evacuate in a "limited scope" operation. It gave no specific reasons, nor did it say if any offensive action might follow.

Seven months into its war against Hamas, Israel has been threatening to launch incursions in Rafah, which it says harbours thousands of Hamas fighters and potentially dozens of hostages. Victory is impossible without taking Rafah, it says.

The prospect of a high-casualty operation worries Western powers and neighbouring Egypt, which is trying to mediate a new round of truce talks between Israel and Hamas under which the Palestinian Islamist group might free some hostages.

The Rafah plan has opened an unusually public rift between Israel and Washington. Speaking to his United States (US) counterpart, Israeli Defence Minister Yoav Gallant linked Monday's operation to the deadlock in indirect diplomacy, which he blamed on Hamas.

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"During their discussion, Gallant discussed the efforts undertaken to achieve the release of hostages and indicated that at this stage, Hamas refuses the frameworks at hand," the Israeli Defence Ministry said in a statement.

"Gallant emphasized that military action is required, including in the area of Rafah, at the lack of an alternative," it added.

This Monday, the Israeli military called on Palestinians in eastern parts of Rafah to move to a nearby "humanitarian area", saying it would "encourage ... the gradual movement of civilians in the specified areas".

An Israeli broadcaster, Army Radio, said evacuations were focused on a few peripheral districts of Rafah, from which evacuees would be directed to tent cities in nearby Khan Younis and Al Muwassi.

Many residents in Rafah said they had received telephone calls to evacuate their homes in the targeted area, in line with the army announcement.

In an overnight aerial attack on Rafah, Israeli planes hit 10 houses, killing 20 people and wounding several, medical officials said.

--Reuters--