Two premature babies are thought to have died after the final generator at the huge Shifa hospital, in Gaza City, ran out of fuel.
It caused incubators to shut down, and has put the lives of more than 30 other babies at risk.
The Physicians for Human Rights-Israel group said: "The destruction and killing have reached an unfathomable scale." It highlighted the lack of electricity, water and oxygen at Shifa, adding: "This is no longer a humanitarian catastrophe - it is a collective death sentence."
Israel denied targeting Shifa but acknowledged fighting is happening "around" it. It claimed the hospital is Hamas's main command post, saying militants are using civilians as human shields and had set up elaborate bunkers beneath it, which Hamas and Shifa staff deny.
In recent days, fighting near the hospital has intensified and supplies have run out. Its director, Mohammed Abu Selmia, said: "There is no electricity. Medical devices stopped. Patients, especially those in intensive care, started to die."
Health ministry spokesman Ashraf Al-Qidra added: "The situation is worse than anyone can imagine. We are besieged inside Shifa."
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