Three hospitals and a UN compound have been bombed by Israel as troops continue to advance into the densely-populated Gaza City.

Around 500 people were sheltering in the Al-Quds hospital in the city's southwestern Tal Al-Hawa district when it was bombed by Israeli jets and set ablaze on Thursday morning.

Hospital officials said the fire was sparked by a "phosphorus shell".

"We have been able to control the fire in the hospital but not in the administrative building," one hospital official said.

"We hope that the flames don't spread again to the wings of the hospital."

Two hospitals east of Gaza City were also hit by Israeli shells as Gazans fled tanks advancing into the city.

It was no immediately clear if any casualties following the raids.

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