Israel's Defence Minister Israel Katz said that the army was seizing large areas in Gaza and incorporating them into buffer zones cleared of their inhabitants, in a bid to force Hamas to release hostages.
"Large areas are being seized and added to Israel's security zones, leaving Gaza smaller and more isolated," Mr Katz said during a visit to the newly announced Morag Corridor between the southern Gaza cities of Rafah and Khan Yunis.
In his comments, Mr Katz said that the population of Gaza was already "evacuating from combat zones".
He appealed to Gazans to force Hamas from power and return the hostages.
"This is the only way to stop the war," he said, threatening that the military would "move to more intense fighting throughout Gaza until the hostages are freed and Hamas is defeated".
Mr Katz also said that Israel was working to implement US President Donald Trump's plan for the "voluntary emigration" of Gaza residents.
Earlier, Gaza's civil defence agency has said an Israeli strike on a residential building in Gaza city killed at least 23 people, most of them children or women, as the military said it targeted a "senior Hamas" militant.
The latest strike comes weeks into a renewed offensive by Israel's military on the war-battered territory, which has displaced hundreds of thousands, while an aid blockade has revived the spectre of famine for its 2.4 million people.
The strike took place in the Shujaiya neighbourhood of Gaza City, the agency's spokesman Mahmud Bassal said.
"The death toll from the Shujaiya massacre has risen to 23 martyrs, including eight children and eight women," he said, adding that more than 60 people were wounded.

First responders and neighbours worked to break through the concrete floor of an entire storey that collapsed in the strike and trapped residents.
The Israeli military said it "struck a senior Hamas terrorist who was responsible for planning and executing terrorist attacks" from the area.
It did not give the target's name and renewed its claim that the militant group uses "human shields", which Hamas denies.
Hamas condemned the strike as one of the "most heinous acts of genocide".
"The terrorist Zionist occupation army has committed a bloody massacre by bombing a densely populated residential area filled with civilians and displaced people," the militant group said in a statement.
"These ongoing massacres against our defenceless people - with full support from the American administration, which is complicit in the aggression - represent a stain on the conscience of the international community."

The Ramallah-based Palestinian Authority's foreign ministry condemned the strike as a "heinous massacre".
"The ministry considers it an official Israeli attempt to systematically kill our people en masse and destroy the very foundations of their existence in the Gaza Strip, thus forcing them to emigrate," it said in a statement.
Israel resumed intense strikes on Gaza on 18 March, ending a two-month ceasefire with Hamas. Efforts to restore the truce have so far failed.
The health ministry in the Hamas-run territory said at least 1,482 Palestinians have been killed in the renewed Israeli operations, taking the overall death toll since the start of the war to 50,846.
Hamas's October 2023 attack that triggered the war resulted in the deaths of 1,218 people on the Israeli side, mostly civilians, according to an AFP tally based on Israeli official figures.

Hossam Badran, a member of Hamas's political bureau, said yesterday that it was "necessary to reach a ceasefire" in Gaza.
He added that "communication with the mediators is still ongoing" but that "so far, there are no new proposals".
Of the 251 hostages seized during Hamas's attack on Israel, 58 are still held in Gaza, including 34 the Israeli military says are dead.
Only 22 aid trucks gained entry to Gaza, says Palestinian Ambassador
The Palestinian Ambassador to Ireland, Jilan Wahba Abdalmajid, has said that between 25 March and 2 April, only 22 aid trucks gained entry to Gaza.
Speaking on RTÉ's Drivetime programme, Ambassador Wahba Abdalmajid labelled it "nonsense" and said that people are dying from starvation.
"It is famine, and the footage that is coming from there and the voices that comes from our friends and relatives is saying that people are dying from malnutrition."
She added: "I heard many, many statements coming from the international community, from heads of State, from the heads of governments saying that we want to protect the Palestinians, but nothing on the ground happened, and this is a failure."