Israel has bombarded southern Gaza after it publicly sparred with its main ally the United States over the possibility of a Palestinian state, the creation of which Washington sees as the only pathway to a lasting peace, AFP reports.

Witnesses reported gunfire and air strikes early on Friday in Khan Younis, the main city in the south of the Gaza Strip, where Israel says many Hamas members and leaders are hiding.

The Palestinian Red Crescent reported “intense” artillery fire near the Al-Amal hospital, while Gaza’s health ministry said 77 people were killed and dozens injured overnight.

The Israeli military said its Givati Brigade was fighting as far south as its troops had reached so far in the campaign. “The soldiers eliminated dozens of terrorists in close-quarters combat and with the assistance of tank fire and air support,” it said.

Many are crowded into shelters where they struggle to get food, water, fuel, and medical care. UN agencies say improved aid access is needed urgently as famine and disease loom.