The Palestinian militant group Hamas accused Israel of trying to undermine efforts to secure a ceasefire in the seven-month-long war that has laid waste to Gaza and left hundreds of thousands of its people homeless and hungry.
Israeli army footage showed tanks rolling through the Rafah crossing complex and the Israeli flag raised on the Gaza side.
Israeli Prime Minister Benjamin Netanyahu said seizing the crossing was a "very significant step" towards its stated aim of destroying Hamas's military capabilities.
Residents reported heavy tank shelling on Tuesday evening in some areas of eastern Rafah.
"They have gone crazy, tanks are firing shells and smoke bombs cover the skies and with smoke over Al-Salam and Jneinah neighbourhoods," said Emad Joudat, 55, a Gaza city resident displaced in Rafah.
"I am now seriously thinking of heading north, maybe to the central Gaza area. If they move further into Rafah it will be the mother of massacres," he told Reuters via a chat app.
UN and other international aid agencies said the closing of the two crossings into southern Gaza - Rafah and Israeli-controlled Kerem Shalom - had virtually cut the enclave off from outside aid and very few stores were available inside.
Red Crescent sources in Egypt said shipments had completely halted.
As well as a key entry point for aid, the crossing was the only exit point for those needing to leave Gaza for medical treatment that is no longer available in the enclave.
Lama Abu Holi, 8, has been in Al-Aqsa hospital for a month, waiting for a chance to leave for treatment for her injured legs.
"Today my name was at the border, and I should travel to get my legs treated," she said, holding a toy in her hospital bed. "They hurt. I am supposed to have an operation. Because the border crossing is shut today, I could not travel."
OFFENSIVE
The seizure of the Rafah crossing came despite weeks of calls from the US, other nations and international bodies for Israel to hold off from a big offensive in the Rafah area - said by Israel to be the Hamas fighters' last stronghold but also the refuge of more than one million displaced Palestinian civilians.
Many of them are struggling to find a safe place to go in the tiny territory that has been bombarded almost non-stop since Hamas fighters stormed over the border into Israel on Oct. 7.
Families have been crammed into tented camps and makeshift shelters, suffering from shortages of food, water, medicine and other essentials.
In Geneva, UN humanitarian office spokesperson Jens Laerke said "panic and despair" were gripping the people in Rafah.
He said that under international law people must have adequate time to prepare for an evacuation, and have a safe route to a safe area with access to aid. This was not the case in the Rafah evacuation, he said.
"It's littered with unexploded ordnance, massive bombs lying in the street. It's not safe," he said.
A total of 34,789 Palestinians, most of them civilians, have been now killed in the conflict, the Gaza Health Ministry said.
The war began when Hamas militants attacked Israel on Oct. 7, killing about 1,200 people and abducting about 250 others, of whom 133 are believed to remain in captivity in Gaza, according to Israeli tallies.
'HUMAN CATASTROPHE'
UN Secretary-General Antonio Guterres appealed to Israel and Hamas to spare no effort to get a truce deal and urged Israel to reopen the border crossings immediately, saying Gaza risks running out of fuel on Tuesday evening.
"Make no mistake – a full-scale assault on Rafah would be a human catastrophe," Guterres said.
Hamas said late on Monday it had told Qatari and Egyptian mediators it had agreed to a ceasefire proposal but Netanyahu said the proposal falls "far short" of Israel's demands.
However, the various players appeared willing to talk again on Tuesday. An official briefed on the talks said the Israeli delegation had arrived in the Egyptian capital Cairo.
Hamas said in a statement its delegation had arrived in Cairo from Doha to follow up on ceasefire talks.
Any truce would be the first pause in fighting since a week-long ceasefire in November during which Hamas freed around half of the hostages and Israel released 240 Palestinians it was holding in its jails.
Since then, all efforts to reach a new truce have foundered over Hamas' refusal to free more hostages without a promise of a permanent end to the conflict, and Israel's insistence that it would discuss only a temporary pause.
