In Khan Yunis, south Gaza's main city which has become the focus of Israel's military campaign, most services at the city's biggest health facility, Nasser Hospital, were no longer functioning "because of combat and intensive bombardments," the Doctors Without Borders (MSF) aid group said.
The health ministry had earlier said thousands of displaced people faced "starvation" at the facility, along with hundreds of patients and staff, "as a result of the Israeli siege".
Israel's army on Tuesday said troops had "encircled" Khan Yunis.
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