Israel's rejection of the idea of a two-state solution with the Palestinians is unacceptable and could prolong the war in Gaza, UN Secretary General Antonio Guterres said.
"Last week's clear and repeated rejection of the two-state solution at the highest levels of the Israeli government is unacceptable," Mr Guterres said in a speech to the Security Council.
"This refusal, and the denial of the right to statehood to the Palestinian people, would indefinitely prolong a conflict that has become a major threat to global peace and security," he told the meeting.
Such an outcome "would exacerbate polarisation and embolden extremists everywhere", he added.
Mr Guterres called for the universal recognition of "right of the Palestinian people to build their own fully independent state".
Israeli Prime Minister Benjamin Netanyahu has drawn global condemnation in recent days - and defied the United States, which provides Israel with billions of dollars in military aid - by rejecting calls for a Palestinian state.
That rejection has come as Israel pounds Hamas in Gaza, where the death toll reached nearly 25,500, with around 70% of the dead women and children, according to the territory's health ministry.
The offensive began in response to the unprecedented attack by Hamas fighters on 7 October that resulted in the deaths of about 1,140 people, mostly civilians, according to an AFP tally based on official Israeli figures.
The militant group also seized about 250 hostages during the attack, with around 132 still remaining in Gaza.
Mr Netanyahu's office last week said Israel "must retain security control over Gaza", even after "Hamas is destroyed", days after the prime minister had also rejected Palestinian sovereignty over the occupied West Bank.
He proclaimed Israel's need to have "security control over all the territory west of the (River) Jordan".
But Mr Guterres pushed back against that assertion, demanding that "Israel's occupation must end".
"The entire population of Gaza is enduring destruction at a scale and speed without parallel in recent history," he said, also calling for the establishment of new humanitarian crossing points and the resumption of aid operations at the Israel port of Ashdod.
Israeli army says Khan Younis now 'encircled'
The Israeli military has said its troops have surrounded the city of Khan Younis in southern Gaza, which has been the epicentre of fighting in recent weeks.
"Over the past day troops... have encircled Khan Yunis and deepened the operation in the area," a military statement said of the densely populated city.
It comes as 24 Israeli soldiers were killed in Israel's worst day of losses in Gaza, the military said.
Spokesman Rear Admiral Daniel Hagari said 21 soldiers were killed when two buildings they had mined for demolition exploded after militants fired at a nearby tank.
Earlier, three soldiers were reported killed in a separate attack.
"Yesterday we experienced one of our most difficult days since the war erupted," Prime Minister Benjamin Netanyahu said.
"In the name of our heroes, for the sake of our lives, we will not stop fighting until absolute victory."
The deaths came the day the Israeli Defence Forces (IDF) launched their biggest operation in a month, to seize remaining parts of Khan Younis, Gaza's main southern city, which is sheltering hundreds of thousands of displaced Palestinians.
"Over the past day, IDF troops carried out an extensive operation during which they encircled Khan Younis," the military said.
"Ground troops engaged in close-quarters combat, directed strikes and used intelligence to coordinate fire, resulting in the elimination of dozens of terrorists."
Israeli tanks, advancing west towards the Mediterranean, shut the road out towards the coast, blocking the escape route for civilians trying to reach Rafah, the last town on Gaza's southern edge - now crammed with more than half the enclave's 2.3 million people.
"I am trying to leave for Rafah but the tanks are now very near to the coast and are firing toward the west," Shaban, 45, an electrical engineer with four children, said by phone.
Cut-off hospitals become makeshift cemetary
The advancing Israelis have blockaded hospitals, which Palestinian officials say makes it impossible to rescue the dead and wounded.
At the European Hospital, reached by Reuters in southern Khan Younis, Ahed Masmah brought in five corpses, piled on a mattress on his donkey cart.
"I found them face-down in the street," he said. "I did a good thing and brought them in."
At Khan Younis's main Nasser hospital, the biggest still functioning in Gaza, bodies were being buried on the grounds because it was unsafe to go out to the cemetery.
Footage filmed by Palestinian journalist Hamdan El-Dahdouh showed persistent gunfire hitting the top of the main building.
"I am besieged at Nasser Hospital now and my life is in great danger. The smell of death, the only smell I know, is filling the place," Dr Mahmoud Abu Shammala posted on Facebook.
"I lived this war as a hero, and if I die I will die a hero."
Another Khan Younis hospital, Al-Khair, was stormed by Israeli troops who arrested staff, according to Palestinian officials.
Al-Amal Hospital was unreachable; the Red Crescent which runs it said a tank shell had hit its fourth-floor headquarters there, a civilian had been killed at the entrance and Israelis were firing from drones on anyone who moved nearby, making it impossible to dispatch ambulances.
Israel says Hamas fighters operate in and around hospitals, which hospital staff and Hamas deny.
"Terrified staff, patients and displaced people are now trapped inside the few remaining hospitals in Khan Younis as heavy fighting continues," Philippe Lazzarini, head of the UN Palestinian relief agency UNRWA, said in a statement.
He said six displaced people had been killed and many injured at one of the biggest UN-run shelters in Khan Younis.
"I call on all parties to take every precaution to minimise harm and protect civilians, medical facilities and personnel and UN premises in accordance with international law."
Hamas says it is only getting stronger
Palestinians hailed the Israeli losses as a victory.
"The resistance said it is going to make Gaza a graveyard for the occupation, and this is what is happening," said Abu Khaled, sheltering in a school in Deir al-Balah just north of Khan Younis.
Israelis spoke of the losses as a necessary sacrifice in a war against Hamas fighters who attacked Israeli towns on 7 October, killing 1,200 people and capturing some 250 hostages.
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"You know, it's our sons, it's our brothers, it’s terrible - but we've got to do what we've got to do so that 7 October doesn’t happen again," said Blina Rhodes on the street in Jerusalem.
Israel has vowed to wipe out Hamas, which is sworn to Israel's destruction and has controlled Gaza since 2007.
Sami Abu Zuhri, head of the political office of Hamas in exile, said the Israeli losses were proof that the armed wing of Hamas was only getting stronger.
