Israel's military pounded central Gaza with heavy air strikes on Wednesday as international talks to secure a truce and hostage release deal resumed.

Tensions were high in annexed east Jerusalem as thousands of police guarded Israel's annual "flag march" that has sparked clashes between Jews and Arabs in previous years.

The bloodiest ever Gaza war, sparked by Hamas's October 7 attack on southern Israel, raged on with jets bombing targets overnight and Palestinian officials reporting yet more deaths.

Urban combat and shelling intensified in Gaza's southern city of Rafah, while fighting resumed in central areas. The army announced targeted operational activity in the areas of Bureij and eastern Deir al-Balah.

Bombardment of central Gaza killed 11 people near the Al-Maghazi camp and two near Deir al-Balah, said witnesses and Palestinian civil defence and hospital officials.

Families rushed the wounded, including children, to hospitals where civilians were once more packing their belongings on pickup trucks and wheelchairs to flee.

The charity Medicines Sans Frontiers (MSF) said at least 70 dead and more than 300 wounded, mostly women and children, had been brought to Al-Aqsa hospital since Tuesday, after "heavy Israeli strikes" in central Gaza.

Karin Huster, an MSF medical adviser in Gaza, described the situation as "overwhelming".

"There are people lying everywhere on the floor, outside... bodies were being brought in plastic bags," she said on X.

US President Joe Biden on Friday outlined what he called a three-phase Israeli plan that would halt the fighting for six weeks while hostages are exchanged for Palestinian prisoners and aid is stepped up.

G7 powers and Arab states have backed the proposal, although sticking points remain -- Hamas insists on a permanent truce and full Israeli withdrawal, demands that Israel has flatly rejected.

A source with knowledge of the negotiations confirmed to AFP that a meeting had taken place on Wednesday "between the Qatari prime minister and head of Egyptian intelligence with Hamas in Doha to discuss a deal for a truce in Gaza and the exchange of hostages and prisoners."

Hamas political chief Ismael Haniyeh said Hamas would "deal seriously and positively" with any offer meeting those demands.

Biden has urged Hamas to accept the deal and deployed CIA chief Bill Burns to Qatar for a renewed push after months of back-and-forth negotiations.

The source with knowledge of the talks said Burns would "continue working with mediators on reaching an agreement between Hamas and Israel on a ceasefire in Gaza and the release of hostages".

Brett McGurk, Biden's top Middle East adviser, was headed to Cairo, according to news site Axios which quoted an administration source as talking of a "full-court press... to get a breakthrough".

Qatar said Tuesday it had yet to see statements from either side "that give us a lot of confidence", but that Doha was "working with both sides on proposals on the table".

Biden earlier told Qatar's emir that "Hamas is now the only obstacle to a complete ceasefire", and "confirmed Israel's readiness to move forward" with the terms he set out last week.

A senior Hamas official in Beirut on Tuesday accused Israel of seeking "endless" negotiations and repeated the group's position rejecting any deal that excludes a permanent ceasefire.

Muhammad al-Najjar, a 35-year-old man from northern Gaza who has twice been displaced by the war, told AFP in Deir al-Balah: "We just want to solve and end the catastrophic situation that we are living. What matters to us is that the war made us exhausted, destroyed us and destroyed everything in our lives."