"Any attack by the occupation army on the city of Rafah would undermine the exchange negotiations," a leader in the Palestinian group told AFP as the Israeli prime minister insists on extending the attacks.

Benjamin Netanyahu earlier this week said he had told troops to prepare to go into the city.

But he has faced mounting calls not to attack the city on the border with Egypt, which has become the last refuge for Gazans fleeing Israel's relentless bombardment elsewhere in the coastal territory.

Foreign governments, including Israel's main allies the United States, and humanitarian organisations in particular have voiced deep concern about the effect of a push on Rafah on displaced civilians.

Some 1.4 million people -- about half of Gaza's total population -- forcibly displaced by Israel, have crowded into Rafah, with many living outside or in tents where food, water, and medical supplies are increasingly scarce.

In an interview to be aired on Sunday, Netanyahu told US broadcaster ABC News that those who urged Israel not to go into Rafah were effectively giving Hamas a license to remain.

Renewed talks for a pause in the fighting have been held in Cairo, with Hamas open to a ceasefire, including a possible exchange of captives for women and children held in Israeli prisons.

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