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Hamas's armed wing said Sunday its fighters were engaged in "heavy fighting" with Israeli forces in Gaza after Israeli military deployed more ground forces across the Palestinian territory.

"Our fighters are currently engaged in heavy fighting with machine-guns and anti-tank weapons with the invading occupation (Israeli) forces in northwest Gaza," the group's armed wing, the Ezzedine al-Qassam Brigades said in a statement.

In an earlier statement the group said two Israeli tanks had caught fire after they were targeted by its fighters, a claim which the army has not confirmed.

Israeli forces continued to pound north Gaza with air and artillery shelling on Sunday evening.

The army said troops had "identified a number of terrorists exiting the shaft of a tunnel" near the Erez border crossing and "confronted the terrorists, killing and injuring them".

Earlier on Sunday the army said it had increased the number of troops fighting inside the Gaza Strip as it stepped up its war on the tiny coastal territory.

On Friday evening, Israeli armoured forces and infantry began operating inside Gaza in what Defence Minister Yoav Gallant called "a new phase" of the war on Hamas.

Israeli forces had made several smaller-scale ground incursions inside Gaza before, but the current one has been their longest presence in the territory since the latest violence erupted.