Local residents and eyewitnesses say dozens of Israeli tanks and military vehicles have pushed into a major residential district of Gaza City, on the second day of Israel's ground offensive aimed at occupying the area.

Video footage shows tanks, bulldozers and armoured personnel carriers moving on the edges of Sheikh Radwan, in northern Gaza City. Thick clouds of smoke can be seen as Israeli forces fire artillery shells and smoke bombs to cover their advance.

The Sheikh Radwan district was home to tens of thousands of people before the war and is considered one of the city's most densely populated areas.

Israel says the aim of its Gaza City offensive is to free hostages held by Hamas and defeat up to 3,000 fighters in what it describes as the group's 'last stronghold' - but the operation has drawn widespread international condemnation.

The leaders of more than 20 major aid agencies, including Save the Children and Oxfam, warned that 'the inhumanity of the situation in Gaza is unconscionable.'

Residents in Sheikh Radwan said Wednesday's incursion followed a wave of heavy airstrikes targeting buildings and main streets across the neighbourhood, in what appeared to be preparation for the ground assault.

Saad Hamada, a local resident who fled south with his family earlier on Wednesday, shared: 'The drones didn't leave anything. They hit solar panels, power generators, water tanks, even the internet network.

'Life became impossible, and that is what forced most people to leave despite the danger.'

Sheikh Radwan includes the areas of Abu Iskandar, al-Tawam, and al-Saftawi. Locals fear that Israeli control of the neighbourhood could allow forces to advance deeper into the city.

The incursion has caused widespread panic among residents, particularly in the western and central parts of Gaza City, as memories of previous assaults loom large.

Witnesses indicated that thousands of families are now fleeing south, with long lines of vehicles carrying personal belongings seen on the roads. The Israeli army opened routes for evacuation amidst reports of transportation scarcity and high costs.

Before the outbreak of hostilities, Sheikh Radwan was a bustling area hosting schools, mosques, and markets, now facing severe devastation amid ongoing military actions.