The IDF has said it entered al-Shifa hospital in a "targeted operation" against Hamas militants.
The Palestinian Authority has accused the Israeli army of "flagrantly" violating international law, after it stormed Gaza's biggest hospital.
Earlier Wednesday morning, Israel’s military said it was carrying out a “precise and targeted operation" against Hamas at al-Shifa hospital.
Mohammed Zaqout, the director of hospitals in Gaza, said Israeli tanks were inside the medical compound and that soldiers had entered buildings, including the emergency and surgery departments, which house intensive care units.
The Israeli army accuses Hamas of using al-Shifa as a military base. It has not, however, provided evidence for this claim - which Hamas and staff at the facility deny.
On Wednesday afternoon, France's President Emmanuel Macron condemned "with the greatest firmness" the bombing of civilian infrastructure around the hospital, while Spain's Prime Minister Pedro Sánchez demanded an "immediate ceasefire" in Gaza and called on Israel to put an end to the "indiscriminate killing of Palestinians" during his inauguration speech in parliament.
Mahmoud Abbas, President of the Palestinian Authority, said Israel is waging "a war against the existence of the Palestinians" in the Gaza Strip.
He also claimed a “barbaric war” and “genocide” “is taking place before the eyes of the world.”
Shifa Hospital - Gaza's largest medical centre
The hospital has become a symbol of the widespread suffering of Palestinian civilians during the war between Israel and Hamas, which broke out on 7 October.
Around 2,300 people, including critically injured patients, newborns and the displaced, are crowded inside Shifa, according to the UN.
Dwindling supplies and no water or electricity have placed those inside in a dire humanitarian situation, with the hospital left with no way to run incubators and other lifesaving equipment.
Gaza's health ministry said 40 patients, including three babies, have died since Shifa’s emergency generator ran out of fuel Saturday.
After days without refrigeration, morgue staff dug a mass grave on Tuesday for 120 bodies in the yard.
Israel's army insists its forces in and around the site are specifically targeting Hamas, which it claims set up a command centre there.
“Israel is at war with Hamas, not with the civilians in Gaza,” said Rear Adm. Daniel Hagari, a spokesperson for the Israeli Defense Forces, on Wednesday.
“The IDF has publicly warned time and again that Hamas’s continued military use of Shifa Hospital jeopardises its protected status under international law.”
Hagari said Israeli forces in Gaza included medics and Arabic speakers to try and provide assistance in the “complex and sensitive environment.”
At around 1 a.m. local time, a Gaza health ministry spokesperson said Israel had informed officials it would raid the hospital “in the coming minutes”.
“There are big explosions and dust entered the areas where we are," Dr Munir al-Bursh, director-general of the Gaza health ministry, told Al Jazeera television, detailing that Israeli forces had raided the western side of the sprawling site.
"We believe an explosion occurred inside the hospital,” he added.
The Strip's health ministry has proposed evacuating the hospital with the supervision of the International Committee of the Red Cross and transferring the patients to hospitals in Egypt, but it has not received any response, ministry spokesman Ashraf al-Qidra said.
While Israel says it is willing to allow staff and patients to evacuate, some Palestinians who have made it out say Israeli forces have fired at evacuees.
National Security spokesman John Kirby said the US has unspecified intelligence Hamas has a command centre under Shifa hospital - backing the claims of its ally Israel.
But Kirby said the US doesn't support airstrikes on the facility where innocent people" are trying to get care.
"To be clear, we do not support striking a hospital from the air and we do not want to see a firefight in the hospital where innocent people, helpless people, sick people are simply trying to get the medical care that they deserve, not to be caught in a crossfire. Hospitals and patients must be protected," he said.
"As we have been clear on multiple occasions, Hamas's actions do not lessen Israel's responsibility to protect civilians in Gaza, and this is obviously something we're going to have an active conversation with our counterparts about."
UK Prime Minister Rishi Sunak has urged Israel to act within international law.