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The Israeli military says ground forces have encircled the southern Gaza city of Khan Younis

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Palestinians flee Khan Younis from Israeli ground and air offensive on the Gaza Strip, Monday, Jan. 22, 2024. (AP Photo/Bashar Taleb)

JERUSALEM (AP) — The Israeli military says its forces have encircled the southern Gaza city of Khan Younis. The territory’s second largest city has seen heavy fighting in recent days, with dozens of Palestinians killed and wounded. Israeli officials have said top Hamas leaders may be hiding in tunnels under the city. Khan Younis is the hometown of Yehya Sinwar, Hamas’ top leader in Gaza, whose whereabouts are unknown. The military announced the encirclement in a statement Tuesday.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

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JERUSALEM (AP) — Twenty-one soldiers were killed in the Gaza Strip in the deadliest attack on Israel's forces since the Oct. 7 Hamas raid that triggered the war, the military said Tuesday, a major setback that could add to mounting calls for a cease-fire.

Prime Minister Benjamin Netanyahu mourned the soldiers but vowed to press ahead with the offensive until “absolute victory” over Hamas. He has also promised to return over 100 hostages held captive in Gaza. But Israelis are increasingly divided on the question of whether it’s possible to do either, and large numbers of Israeli casualties have pressured Israel’s government to halt past military operations.

A senior Egyptian official meanwhile said Israel has proposed a two-month cease-fire in which the hostages would be freed in exchange for the release of Palestinians imprisoned by Israel and top Hamas leaders in Gaza would be allowed to relocate to other countries.

The official, who was not authorized to brief media and spoke on condition of anonymity, said Hamas rejected the proposal and is insisting that no more hostages will be released until Israel ends its offensive and withdraws from Gaza. Israel's government declined to comment on the talks.

The official said Egypt and Qatar, which have brokered past agreements between Israel and Hamas, were developing a multistage proposal to try and bridge the gaps. Families of the hostages have called for Israel to reach a deal with Hamas, saying time is running out to bring the hostages home alive.

On Monday, Israeli reservists were preparing explosives to demolish two buildings in central Gaza when a militant fired a rocket-propelled grenade at a tank nearby. The blast triggered the explosives, causing both two-story buildings to collapse on the soldiers inside.

At least 217 soldiers have been killed since the ground offensive began in late October, including three killed in a separate event Monday, according to the military.

Netanyahu acknowledged it was “one of the hardest days” since the war began and said the military would launch an investigation. “In the name of our heroes, and for our own lives, we will not stop fighting until absolute victory," he wrote on X, formerly known as Twitter.

Israel launched its offensive after Hamas crossed the border Oct. 7, killed over 1,200 people and abducted some 250 others. More than 100 were released in November in exchange for a weeklong cease-fire and the release of 240 Palestinians imprisoned by Israel.

The offensive has caused widespread destruction, displaced an estimated 85% of Gaza's population and left over 25,000 Palestinians dead, according to health officials in the Hamas-run territory. The United Nations and international aid agencies say the fighting has caused a humanitarian disaster, with a quarter of Gaza's 2.3 million people facing starvation.

The war has heightened regional tensions, with Iran-backed groups in Lebanon, Syria, Iraq and Yemen attacking United States and Israeli targets in support of Palestinians. The U.S. and Britain launched another wave of strikes Monday against the Houthi rebels in Yemen, who have targeted international shipping in the Red Sea in what they portray as a blockade of Israel.

DEADLY FIGHTING IN THE CENTER AND SOUTH

Hamas is believed to have suffered heavy losses but has continued to put up stiff resistance in the face of one of the deadliest air and ground offensives in recent history. Militants are still battling Israeli forces across the territory and launching rockets into Israel.

The attack that killed the soldiers occurred some 600 meters (yards) from the border in Maghazi, one of three built-up refugee camps in central Gaza dating back to the 1948 war surrounding Israel's creation.

Ground operations have been focused on the camps, as well as the southern city of Khan Younis, after Israel claimed to have largely defeated Hamas in northern Gaza in operations that caused widespread destruction to that part of the territory, including Gaza City.

Dozens of Palestinians were killed Monday in heavy fighting in Khan Younis, where people dug graves in the courtyard of the city's Nasser Hospital as staff struggled to deal with the large number of wounded people, including children.

Gaza’s internet and phone networks collapsed again Monday for the 10th time during the war, posing another challenge for first responders and making it impossible for people to reach loved ones in different parts of the territory.

Israel believes Hamas commanders may be hiding in vast tunnel complexes beneath Khan Younis, the hometown of the group's top leader in Gaza, Yehya Sinwar, whose location is unknown. Hamas leaders are also believed to be using hostages as human shields, further complicating any rescue efforts.

PRESSURE FOR A CEASE-FIRE

The growing death toll and dire humanitarian situation have led to increasing international pressure on Israel to scale back the offensive and agree to a pathway for the creation of a Palestinian state after the war. The United States, which has provided crucial military aid for the offensive, has joined those calls.

But Netanyahu, whose popularity has plummeted since Oct. 7 and whose governing coalition is beholden to far-right parties, has rebuffed both demands.

Instead, he has said Israel will need to expand operations and eventually take over the Gaza side of the border with Egypt, where hundreds of thousands of Palestinians who have fled from other areas are packed into overflowing U.N.-run shelters and sprawling tent camps.

That drew an angry protest from Egypt's government, which rejected Israeli allegations that Hamas smuggles in weapons across the heavily guarded frontier.

Diaa Rashwan, head of Egypt’s State Information Service, said Monday that any Israeli move to occupy the border area would “lead to a serious threat” to relations between the two countries, which signed a landmark peace treaty over four decades ago. Egypt is also deeply concerned about any potential influx of Palestinian refugees into its Sinai Peninsula.

Rashwan said Egypt was in full control of the border after taking a number of measures in recent years, including the creation of a 5-kilometer (3-mile) buffer zone and the construction of barriers above and below ground.

Egypt “is capable of defending its interests and sovereignty over its land and borders, and will not mortgage it in the hands of a group of extremist Israeli leaders who seek to drag the region into a state of conflict and instability,” Rashwan said.

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Jobain reported from Rafah, Gaza Strip. Associated Press writers Samy Magdy in Cairo and Melanie Lidman in Jerusalem contributed to this report.

Josef Federman And Najib Jobain, The Associated Press

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