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Hamas on Monday said it accepts a proposal for a truce in the seven-month-old war in Gaza, as Israel renewed an order for Palestinians in Rafah to evacuate ahead of a long-threatened invasion of the city.

The Hamas announcement brought cheering crowds onto the street amid tears of happiness, chants of "Allahu Akbar" ("God is greatest") and celebratory shooting in the air.

Israeli Prime Minister Benjamin Netanyahu's office said the proposal "is far from Israel's essential demands", but the government will send negotiators for talks "to exhaust the potential for arriving at an agreement".

Close Israel ally the United States said it was "reviewing" the Hamas response.

Hamas member Khalil al-Hayya told the Qatar-based Al Jazeera channel the proposal agreed to by Hamas includes a three-phased truce.

He said it includes a complete Israeli withdrawal from Gaza, the return of Palestinians displaced by the war and a hostage-prisoner exchange, with the goal of a "permanent ceasefire".

Israel's military meanwhile reiterated an earlier call for residents of east Rafah to evacuate as it prepares for a "ground operation" in the southern Gaza city.

Renewing the call for people to leave, military spokesman Daniel Hagari said Israeli "aircraft targeted more than 50 terror targets in the Rafah area" on Monday.

In response, the armed wing of the Palestinian Islamic Jihad said its militants launched rockets from Gaza towards southern Israel.

Hamas in a statement said its leader Ismail Haniyeh had informed mediators Qatar and Egypt "of Hamas's approval of their proposal regarding a ceasefire agreement".

A senior Hamas official, speaking to AFP on condition of anonymity, said Israel must now decide whether it accepts or "obstructs" a truce after seven months of war.

Israel called on Palestinians to leave eastern Rafah amid increasing global alarm about the consequences of an Israeli ground invasion of the city bordering Egypt.

Stephane Dujarric, spokesman for UN Secretary-General Antonio Guterres, condemned the order, saying it would be "impossible to carry out safely", and the world body's human rights chief Volker Turk called it "inhumane".

Later, Dujarric said that Guterres called on both Israel and Hamas to "go the extra mile needed" to seal a truce.

The evacuation call followed disagreement between Israel and Hamas over the group's demands to end the war, during weekend negotiations in Cairo.

Egyptian state-linked media said the talks stalled after a rocket attack claimed by Hamas's armed wing killed four Israeli soldiers on Sunday.

Netanyahu has vowed to send ground troops into Rafah regardless of any truce, defying international concerns.

In the statement responding to Hamas's announcement, Netanyahu's office also said the Rafah offensive will go ahead "to exert military pressure on Hamas in order to advance the release of our hostages".

Over Monday night and Sunday morning, Israel has waged a relentless bombardment of Rafah, with at least 12 killed in a matter of hours, according to Wafa.