Deadly fighting and bombardment rocked Gaza on Tuesday as international mediators pushed for a new halt in the Israel-Hamas war and a deal to release hostages. Heavy Israeli strikes and urban combat across the besieged Gaza Strip killed 128 more people overnight, the health ministry in the Hamas-run Palestinian territory said. The epicentre of fighting has been the southern city of Khan Yunis, where vast areas have been reduced to a muddy wasteland of bombed-out buildings. Troops fighting in city blocks and tunnels “eliminated terrorists during combat and located large quantities of weapons”, the Israeli military said. Islamic Jihad, a Palestinian militant group fighting alongside Hamas, said it was battling Israeli troops near Khan Yunis and in other areas including Gaza City. In the Israeli-occupied West Bank, where violence has surged since the start of the war, Israeli undercover troops raided a hospital in the northern city of Jenin, killing three men the army said were members of a “terrorist cell”. Some of the Israeli agents were dressed as medical staff and carried a wheelchair and baby carrier as props, according to officials and hospital CCTV footage released by the Ramallah-based Palestinian health ministry. Hamas said one of the three killed, Muhammad Jalamnah, was a commander in its armed wing. The Israeli army charged that Jalamnah, allegedly “inspired” by the October 7 attack that triggered the war, had “planned to carry out a terror attack in the immediate future and used the hospital as a hiding place”. The Palestinian health ministry stressed that hospitals enjoy special protection under international law and urged the United Nations to help end Israel’s “daily string of crimes… against our people and health centres”. The Gaza war, now in its fourth month, has left much of the coastal territory in ruins and sparked a spiralling humanitarian crisis for its 2.4 million people, many of whom face the threats of hunger and disease. ‘Distraction’: Israel has charged that around a dozen staff of the main UN aid agency for Palestinians took part in the October 7 attack, leading key donor countries including the United States and Germany to suspend funding. UN Secretary-General Antonio Guterres, who has pleaded for continued support to meet the “dire needs”, will have talks with donors in New York on Tuesday, his office said, as investigations into Israel’s claims continue. The World Health Organization called the row over UNRWA “a distraction from what’s really going on every day, every hour, every minute in Gaza”. “As important as this discussion is, let’s not forget what the real issues are on the ground,” said spokesman Christian Lindmeier. US Secretary of State Antony Blinken urged UNRWA to address the allegations, but also hailed the agency’s “absolutely indispensable role” in supporting Gazans. In Lebanon, dozens joined a Hamas-led rally to protest the funding halts. UNRWA estimates 250,000 Palestinian refugees live there, most of them in poverty. “The suspension of aid would be catastrophic,” said 65-year-old Abu Mohammed, urging governments “to reverse their decision”. The deadliest ever Gaza war was triggered by Hamas’s unprecedented October 7 attack that resulted in about 1,140 deaths in Israel, mostly civilians, according to an AFP tally of official figures. Militants also seized 250 hostages, of whom Israel says around 132 remain in Gaza, including the bodies of at least 28 dead captives. Israel’s relentless military offensive has killed at least 26,751 people in Gaza, most of them women and children, according to the Gaza health ministry. Truce talks: – Fears have grown that the Middle East could face a wider conflict, after months of violence involving Iran-backed allies of Hamas in Lebanon, Iraq, Syria and Yemen, who have also targeted US forces. In the latest efforts to broker a new truce, a meeting in Paris on Sunday between top US, Israeli, Egyptian and Qatari officials resulted in a proposed framework. Hamas confirmed on Tuesday that it had received the proposal, saying on its Telegram account that it was “in the process of examining it and delivering its response”. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, whose government helped broker a previous truce in November, voiced hope an initial deal might lead to a permanent ceasefire. According to him, the current plan included a phased truce that would see women and children hostages released first, with more aid also entering Gaza. Israeli Prime Minister Benjamin Netanyahu, whose office earlier also called the talks “constructive”, on Tuesday ruled out releasing “thousands” of Palestinian prisoners as part of any deal to halt fighting in Gaza. “I would like to make it clear… We will not withdraw the IDF (army) from the Gaza Strip and we will not release thousands of terrorists. None of this will happen,” he said in an address at Eli settlement in the occupied West Bank. Israel’s top ally the United States expressed hope for a deal, with Blinken telling reporters that “very important, productive work has been done”. In southern Gaza, Palestinians buried dozens of bodies in a mass grave after officials said Israel returned remains it had exhumed from the territory. The Israeli military did not respond to a request to comment, although it has previously made remarks about exhuming bodies from Gaza graves in search of Israeli hostages.