Israeli troops backed by helicopter gunships, tanks and heavy guns thrust deeper into the city than ever before on Thursday to seek Hamas fighters, they said.
It wasn't clear whether this would be a brief foray or signal a new phase in Israel's devastating offensive against Gaza's Islamic Hamas rulers.
Israel has balked at launching all-out urban warfare in Gaza City, where Hamas militants are more familiar with the lay of the land and Israeli casualties would be liable to spiral.
Israel launched the offensive on December 27 to stop militant rocket fire on southern Israel from Gaza.