Israel's Defence Minister Yoav Gallant met troops inside Gaza on Monday, and vowed in a statement that "life will return to its course" for residents of border communities hit in Hamas's October 7 attacks that triggered the war.
In the southern Gaza Strip, AFPTV footage showed smoke billowing after a strike on Rafah and further north in Khan Yunis Palestinians, including children, wounded in a strike were brought to Nasser hospital in Khan Yunis.
And in central Gaza's Deir al-Balah residents were inspecting the damage and searching for survivors under the rubble.
Israeli military spokesman Daniel Hagari said the army was preparing for the "prolonged fighting" ahead.
"We will be required for additional tasks and warfare throughout this year," he said.
Heavy artillery fire and air strikes were reported across the length of the territory, with the health ministry there saying 15 dead bodies from the same family were recovered Monday from the rubble of a bombed house in Jabalia, in northern Gaza.
"It's the worst year of our lives," Sami Hamouda, 64, told AFP as 2023 came to a close.
"Every new day is like the previous one: bombings, death and mass killings."
As fighting raged on in the Hamas-run Gaza Strip, Israel's top court on Monday issued a ruling against a key component of the government's controversial judicial overhaul, which had been met with mass protests before the war.
Prime Minister Benjamin Netanyahu's war cabinet includes former opponents who had agreed to join on condition that the coalition freezes the divisive reform agenda.
The bloodiest ever Gaza war was triggered by Hamas's October 7 attacks on Israel, which resulted in the deaths of around 1,140 people, most of them civilians, according to an AFP tally based on official figures.
The militants also took around 250 people hostage that day, more than half of whom remain in Gaza according to Israeli officials.
Israel has vowed to destroy Hamas and launched a punishing offensive that has reduced vast areas of Gaza to a ruined wasteland and killed at least 21,978 people, mostly women and children, according to the territory's health ministry.
The Israeli army says 173 soldiers have been killed inside Gaza in the battle against the Islamist militant group which Israel, the United States and European Union have designated a "terrorist" organisation.
- 'Hopeless' conditions -
Hamas marked the start of 2024 by firing a rocket barrage at Israel at the stroke of midnight in what it called a "response to the massacres of civilians".
AFP journalists in Tel Aviv witnessed missile defence systems intercept rockets overhead.
Hagari said the Israeli army was "adapting the planning of the force deployment in Gaza" including reserve soldiers, as "the fighting will continue and they will still be required".
"Some of the reservists will return to their families and employment this week. This will significantly ease the burden on the economy and allow them to gather strength for the upcoming activities in the next year."
Since Israel imposed a siege at the outset of the war, Gazans have been facing dire shortages of food, water, fuel and medicine -- eased only by aid trucks, about 120 of which entered on Sunday.
The UN says 85 percent of the population of the Gaza Strip has been displaced.
Mostafa Shennar, a 43-year-old Palestinian displaced from Gaza City, told AFP in the southern border town of Rafah that "living conditions... are just hopeless".
Shennar, a coffee vendor, complained of "soaring prices" that have slashed his income.
"I used to sell two large cups of coffee for one shekel ($0.28)" -- now the price of "one small cup", he said, "and even that is hard to obtain" for many Gazans.
Barber Tamer al-Shaer, whose shop in Rafah now stands amid rubble, said a strike had hit the area, but "I tried to clear out the salon, and it's okay. I make a living for myself and my family."
Blades are hard to find and for electricity, Shaer has "a small solar panel", he said, adding: "May God find us a solution as soon as possible."
In Israel, Gallant, the defence minister, said residents of some towns and villages near the Gaza border -- most of whom evacuated since October -- "will soon be able to return home".
International mediators have continued efforts toward a new pause in fighting.
An Egyptian three-phase plan proposes renewable ceasefires, a staggered release of hostages for Palestinian prisoners, and ultimately an end to the war, sources close to Hamas said.
Their allies Islamic Jihad said on Saturday that Palestinian factions were evaluating the proposal and would give a response "within days".
- Regional fears -
Violence has surged in the occupied West Bank, where more than 300 Palestinians have been killed by Israeli forces and settlers since October.
Israeli watchdog Yesh Din on Monday said 2023 was the "most violent" year on record for settler attacks in the territory, which Israel has occupied since 1967, "in both the number of incidents and their severity".
Two far-right Israeli ministers, Bezalel Smotrich and Itamar Ben Gvir, have called since Sunday for the return of Jewish settlers to Gaza, from which Israel unilaterally withdrew in 2005.
Both said separately that Israel should "encourage" the territory's approximately 2.4 million Palestinians to emigrate.
The war in Gaza has also raised fears of a broader regional conflict, with hostilities flaring with mostly Iran-backed militant groups in nearby countries who say they are acting in support of Hamas.
Iranian news agency Tasnim said Monday the Alborz warship had entered the Red Sea, a globally important waterway where a US-led maritime coalition has deployed to stop attacks from Yemen's Tehran-backed Huthi rebels.
Also on Monday, Israel said it struck Lebanon, where the military has fought the Hezbollah militant group, in response to attempted drone launches.
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