Israeli strikes in central Gaza killed at least 35 people Sunday, hospital officials said, as fighting raged across the tiny enclave a day after Israel’s prime minister said the war will continue for “many more months,” resisting international calls for a cease-fire.

The military said Israeli forces were operating in Gaza’s second-largest city, Khan Younis, and residents reported strikes in the central region, the latest focus of the nearly three-month air-and-ground war that has raised fears of a regional conflagration.

The U.S. military said its forces shot and killed several Iran-backed Houthi rebels when they tried to attack a cargo ship in the Red Sea, an escalation in a maritime conflict linked to the war. And an Israeli Cabinet minister suggested encouraging Gaza's population to emigrate, remarks that could worsen tensions with Egypt and other friendly Arab states.

Israel says it wants to destroy Hamas’ governing and military capabilities in Gaza, from where it launched its Oct. 7 attack on southern Israel. The militants killed some 1,200 people after breaking through Israel's extensive border defenses, shattering its sense of security. They also captured around 240 hostages, nearly half of whom were released during a temporary cease-fire agreement in November.

Just after midnight on New Year's Day, Hamas militants fired a barrage of rockets, setting off air raid sirens in southern and central Israel. No injuries were reported.

Displaced Palestinians found little to celebrate on New Year's Eve in Muwasi, a makeshift camp in a mostly undeveloped area of southern Gaza's Mediterranean coast designated by Israel as a safe zone.

“From the intensity of the pain we live, we do not feel that there is a new year,” said Kamal al-Zeinaty, huddled with his family around a fire inside a tent. “All the days are the same.”

Another relative, Zeyad al-Zeinaty, who fled with the family from the Jabaliya refugee camp in northern Gaza, said his wife, brother and grandchildren are among many relatives he has lost in the war.

Israel's unprecedented air and ground offensive has killed more than 21,800 Palestinians and wounded more than 56,000 others, according to the Health Ministry in Hamas-ruled Gaza, which does not distinguish between civilian and combatant deaths.

The war has sparked a humanitarian crisis, with a quarter of Gaza residents facing starvation, according to the United Nations. Israel’s bombardments have leveled vast swaths of the territory, displacing some 85% of Gaza’s 2.3 million residents.

THE OFFENSIVE GRINDS ON

Israel expanded its offensive to central Gaza this week, targeting a belt of densely built-up communities that house refugees from the 1948 war surrounding Israel’s creation and their descendants.

In Zweida, an Israeli airstrike killed at least 13 people and wounded dozens of others, according to witnesses. The bodies were draped in white plastic and laid out in front of a hospital, where prayers were held before burial.

“They were innocent people,” said Hussein Siam, whose relatives were among the dead. “Israeli warplanes bombarded the whole family.”

Officials from Al-Aqsa Hospital in central Deir al-Balah said the 13 were among 35 bodies received on Sunday.

The Israeli military said it was battling militants in Khan Younis, where Israel believes Hamas leaders are hiding. It also said its forces operating in the Shati refugee camp, in northern Gaza, found a bomb in a kindergarten and defused it. Hamas continued to launch rockets toward southern Israel.

Israel has faced stiff resistance from Hamas since it began its ground offensive in late October, and the military says 172 soldiers have been killed during that time.

Rear Adm. Daniel Hagari, the chief military spokesman, said Sunday that Israel was withdrawing some forces from Gaza as part of its “smart management” of the war. He did not say how many, and held out the possibility they would return at a later point in the war.

Israeli media said up to five brigades, numbering thousands of soldiers, would be withdrawn, but it was not immediately clear if it represented a normal troop rotation or a new phase in the fighting. Hagari also said some reservists would return to civilian life to bolster Israel’s wartime economy.

The fighting has pushed much of Gaza's population south, where people have flooded shelters and tent camps near the border with Egypt. Hundreds of thousands have sought shelter in the central town of Deir al-Balah. Israel has continued to carry out strikes in both areas.

Eman al-Masri, who gave birth to quadruplets a week ago at a hospital in Deir al-Balah, is now sheltering with them in a room with 50 other people at a school-turned-shelter. “There is a shortage of diapers, they are not available, and no milk,” she said.

ISRAELI MINISTER URGES MASS MIGRATION FROM GAZA

The scale of the destruction and the exodus to the south has raised fears among Palestinians and Arab countries that Israel plans to drive Gaza's population out and prevent it from returning.

On Sunday, Israel's far-right finance minister said it should “encourage migration” from Gaza and re-establish Jewish settlements in the territory, where it withdrew settlers and soldiers in 2005.

“If in Gaza there were only 100,000 or 200,000 Arabs and not 2 million, the entire discussion about ‘the day after’ would be completely different," Finance Minister Bezalel Smotrich told Army Radio.

Smotrich has been largely sidelined by a war Cabinet that does not include him. But his comments risked worsening tensions with neighboring Egypt, which is deeply concerned about a possible mass influx of Palestinian refugees, along with other friendly Arab countries.

Later Sunday, an official in the prime minister’s office said Israel does not want to resettle Palestinians.

“Contrary to false allegations, Israel does not seek to displace the population in Gaza," the official said in a statement to The Associated Press. "Subject to security checks, Israel’s policy is to enable those individuals who wish to leave to do so.” The official spoke on condition of anonymity because he was not authorized to discuss the matter with the media.

Israel is also at odds with the United States, which has provided crucial military aid for the offensive, over Gaza's future.

Israeli Prime Minister Benjamin Netanyahu has said Israel must maintain open-ended security control over the Gaza Strip. At a news conference Saturday, he said the war would continue for “many more months" and that Israel would assume control of the Gaza side of the border with Egypt.

Israel says Hamas has smuggled weapons from Egypt, but Egypt is likely to oppose any Israeli military presence there.

Netanyahu has also said he won't allow the internationally-backed Palestinian Authority, which administers some parts of the occupied West Bank, to expand its limited rule to Gaza, where Hamas drove its forces out in 2007.

The U.S. wants a unified Palestinian government to run both Gaza and parts of the Israeli-occupied West Bank as a precursor to eventual statehood. The last Israeli-Palestinian peace talks broke down over a decade ago, and Israeli governments since have been staunchly opposed to Palestinian statehood.