Israel on Monday told residents of Gaza City to leave immediately after warning that it would step up airstrikes and ground operations in the Gaza Strip in a "mighty hurricane" if Hamas does not free the last hostages it is holding and surrender.

In what it called a final warning, Israel's military told the Palestinian militant group that Gaza would be destroyed if it did not disarm and release 48 hostages seized in the 2023 attacks on Israel that triggered the war in Gaza.

Residents said Israeli forces had bombed Gaza City from the air and blown up old armoured vehicles in its streets.

Hamas was meanwhile studying the latest US ceasefire proposal, delivered on Sunday with a warning from President Donald Trump that it was the militant group's "last chance".

"I say to the residents of Gaza (City): you have been warned - get out of there!" Prime Minister Benjamin Netanyahu said, adding that Israel had in recent days knocked down 50 "terror towers" in a prelude to an upcoming "ground operation" in Gaza City.

"A mighty hurricane will hit the skies of Gaza City today, and the roofs of the terror towers will shake," Israeli Defence Minister Israel Katz wrote on X.

"This is a final warning to the murderers and rapists of Hamas in Gaza and in the luxury hotels abroad: Release the hostages and lay down your weapons - or Gaza will be destroyed, and you will be annihilated."

Katz's post appeared before reports of a shooting at a bus stop in Jerusalem that killed six people, including one Spanish citizen. Hamas praised the attackers.

The Israel Defense Forces (IDF) bombed a 12-floor block in the middle of Gaza City where dozens of displaced families had been housed, three hours after urging those inside and in hundreds of tents in the surrounding area to leave.

In a statement, the IDF said Hamas militants who had "planted intelligence gathering means" and explosive devices had been operating near the building and "have used it throughout the war to plan and advance terror attacks against IDF forces".

According to a senior Israeli official, the latest US proposal calls for Hamas to return all 48 remaining living and dead hostages on the first day of a ceasefire, during which negotiations would be held to end the war.

Hamas has long said it intends to hold onto at least some hostages until negotiations are complete. It said in a statement it was committed to releasing them all with a "clear announcement of an end to the war" and the withdrawal of Israeli forces.

Hamas senior official Bassem Naim said on Monday that the US's Gaza ceasefire proposal amounted to "preliminary" ideas.

"It is clear that the primary goal is to reach the refusal of the offer and not reach an agreement that leads to the end of the war," he said in a post on his Telegram channel, without presenting the group's official stance.

Israel launched a major assault last month on Gaza City, where hundreds of thousands of residents are living in the ruins having returned after the city experienced the most intense fighting of the war's early weeks nearly two years ago.

The Israeli military said that four soldiers had been killed in northern Gaza on Monday.

Among at least 25 Palestinians reported killed in Gaza on Monday was Osama Balousha, a journalist for Palestinian media, medics said.

Fifteen other people were killed in separate Israeli strikes and gunfire across the enclave, medics said, taking Monday's death toll to at least 40. (Reuters)