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Israel has issued sweeping evacuation orders covering most of the southern Gaza city of Rafah, indicating it could soon launch another major ground operation.

The bodies of eight Red Crescent medics and other Palestinian rescue workers who came under fire more than a week ago have been recovered from a grave in the sand in the south of the Gaza Strip, UN officials said.

Israel has proposed an extended truce in Gaza in exchange for the return of about half the remaining hostages, Israeli officials said on Monday, as the military issued new evacuation orders and said "intense operations" were planned in the south of the enclave.