Israeli Prime Minister Benjamin Netanyahu on Sunday offered to let Hamas leaders leave Gaza but demanded the group abandon its arms, as his country kept up its bombardment of the Palestinian territory.
Gaza's civil defense agency said an Israeli air strike on a house and tent sheltering displaced Palestinians killed at least eight people, including five children.
The strike in Khan Yunis came in the morning on the first day of Eid al-Fitr, the festival marking the end of the Muslim fasting month of Ramadan.
Israel resumed intense bombing of the Palestinian territory on March 18 and then launched a new ground offensive, ending a nearly two-month ceasefire in the war with Hamas.
Netanyahu rejected criticism that his government was not engaging in negotiations aimed at releasing hostages held in Gaza, insisting the renewed military pressure on Hamas was proving effective.
"We are negotiating under fire... We can see cracks beginning to appear" in Hamas's positions, the Israeli leader told a cabinet meeting.
In the "final stage", Netanyahu said that "Hamas will lay down its weapons. Its leaders will be allowed to leave".
"The military pressure is working," Reuters quoted him as saying.
"The combination of military pressure and diplomatic pressure is the only thing that has brought the hostages back."
Hamas has expressed a willingness to relinquish Gaza's administration, but has warned its weapons are a "red line".
Egypt, Qatar and the United States are attempting to again broker a ceasefire and secure the release of Israeli hostages still held in Gaza.
A senior Hamas official stated on Saturday that the group had approved a new ceasefire proposal put forward by mediators and urged Israel to support it.
Netanyahu's office confirmed receipt of the proposal and stated that Israel had submitted a counterproposal in response.
However, the details of the latest mediation efforts remain undisclosed.
