The military said its forces are operating "both above and below ground" in eastern parts of Deir alBalah and Bureij, which is a built-up Palestinian refugee camp dating back to the 1948 war surrounding Israel's creation.
It said the operation began with air strikes on militant infrastructure, after which troops began a "targeted daylight operation" in both areas.
The eight-month offensive has largely cut off the flow of food, medicine and other supplies to Palestinians who are facing widespread hunger.
International mediators are waiting for Israel and Hamas to respond to a new ceasefire and hostage release proposal, according to Qatar, which has played a key role in negotiations alongside Egypt and the United States.
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