An Israeli air strike on two houses in the Sabra neighbourhood of Rafah killed at least 12 people including women and children.
Among the dead was a senior commander of the militant Al-Mujahedeen Brigades, and his family, and the family of another group leader, medics, relatives and the group said.
Israel says Hamas militants are hiding in Rafah, where the population has been swelled by hundreds of thousands of Gazans seeking refuge from the bombardments that have reduced most of the coastal enclave to ruins.
In the United States, the White House repeated its hope that Israel would not launch a full operation in Rafah, saying it did not believe that would advance Israel's aim of defeating Hamas.
'Smashing into Rafah, in [President Biden's] view, will not advance that objective ,' spokesperson John Kirby said.
Kirby said Hamas had been pressured significantly by Israel and there were better options to hunt down what remains of the group's leadership than an operation with significant risk to civilians.
Israel's assault on Gaza has killed nearly 35,000 Palestinians and wounded nearly 80,000, most of them civilians, the health ministry in Hamas-run Gaza said.
It launched its offensive in response to a cross-border attack by Hamas militants on Israel on Oct. 7 in which they killed about 1,200 people and abducted 252. Some 128 hostages remain in Gaza and 36 have been declared dead, according to the latest Israeli figures.
Biden on Wednesday issued his starkest warning yet against a full ground invasion in Rafah, telling CNN that: 'I made it clear that if they go into Rafah...I'm not supplying the weapons.'
Israel's ambassador to the United States said the decision to withhold weapons from Israel over Rafah sends the 'wrong message' to Hamas and the country's foes.
'It puts us in a corner because we have to deal with Rafah one way or the other,' Ambassador Michael Herzog told a Carnegie Endowment for International Peace webinar.
The Israeli military has the munitions it requires for operations in Rafah and other planned operations, chief armed forces spokesperson Rear Admiral Daniel Hagari said.
Israeli armed forces have already killed 50 Palestinian gunmen in east Rafah and uncovered several tunnels, Hagari said. Hamas had no immediate comment.
Talks endIn Cairo, delegations from Hamas, Israel, the U.S., Egypt and Qatar had been meeting since Tuesday. The talks in Egypt's capital made some headway but no deal was reached, according to two Egyptian security sources.
