Israel has stepped up its air and ground offensive in Gaza with more attacks on Hamas militants and command posts as both sides marked the first anniversary of a war that has destroyed much of the territory and changed Palestinians' lives forever.

For its part, Hamas said it struck Israel's commercial capital Tel Aviv with a missile salvo on Monday, setting off sirens in central Israel. 

Two people were lightly injured, according to the Israeli ambulance service.

The rocket volley signalled Hamas's enduring ability to hit back despite a protracted Israeli military onslaught aimed at destroying its combat capabilities, a year after the shock cross-border Hamas incursion into Israel that kindled the war.

(Israel's war against Hamas in Gaza has sparked a hunger and health crisis. AP PHOTO)

Hamas's smaller ally Islamic Jihad said it hit Sderot, Nir Am and other Israeli towns near Gaza with rockets. 

The Israeli military said it intercepted five rockets fired from Gaza.

Hamas-led militants stormed through Israeli towns and kibbutz villages near the border on October 7, 2023, killing 1200 people and taking about 250 as hostages, according to Israeli tallies.

Israel's subsequent military campaign in Gaza has killed nearly 42,000 Palestinians, according to the small coastal enclave's health ministry, displaced nearly the entire 2.3 million population, and caused a hunger and health crisis.

On Monday, Israeli tanks advanced into Jabalia, the largest of Gaza Strip's eight historical urban refugee camps, after encircling it, residents said. 

Soon after the rocket volley, the Israeli military expanded evacuation orders in Jabalia to cover areas in the northern towns of Beit Hanoun and Beit Lahiya.

Residents said Israeli forces pounded Jabalia from the air and the ground, and medics said several Palestinians had been killed.

The Israeli military said it killed dozens of militants and dismantled military infrastructure in Jabalia, saying the operation would continue to prevent Hamas regrouping.

In the central city of Deir Al-Balah, where a million displaced people are sheltering, an Israeli air strike hit tents inside Al-Aqsa Hospital, wounding 11 people, Palestinian medics said. 

The Israeli military said it struck at Hamas militants operating from a command centre embedded inside the hospital.

Monday was the first anniversary of the October 7 Hamas attack, which has given rise to a multi-front conflict across the Middle East as Israel sharply escalates its campaign against the Iranian-backed militant movement Hezbollah in Lebanon.

US-backed Arab mediators Qatar and Egypt have been unable to broker a Gaza ceasefire that could also help defuse the Lebanon hostilities and see the release of hostages held in Gaza as well as many Palestinians jailed by Israel.

Israel and Hamas each accuse the other of adding conditions that are impossible to meet.

Hamas wants a deal that ends the war and gets Israeli forces out of Gaza, while Israeli Prime Minister Benjamin Netanyahu has vowed the war can end only with the eradication of Hamas.

By Nidal al-Mughrabi and Hussam al-Masri in Cairo