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People walk on rubble as they inspect the damage at the UN Relief and Works Agency for Palestine Refugees (UNRWA) building complex in western Gaza City's Al-Sinaa neighbouhood on July 12.OMAR AL-QATTAA/Getty Images

Israeli forces retreated from some Gaza City districts overnight after a fierce, week-long offensive, leaving dozens of dead and wrecked homes and roads in the Palestinian enclave’s biggest urban area, residents and rescue services said on Friday.

The offensive, 10 months into Israel’s campaign to eliminate Hamas militants, took place as U.S.-backed mediators sought to finalize a peace deal that would free remaining hostages taken by the militants in their cross-border rampage on Oct. 7.

The Gaza Civil Emergency Service said teams had collected around 60 bodies of Palestinians killed by Israeli forces over the past week from the area of Tel Al-Hawa and the edges of the Sabra neighbourhood in Gaza City.

Both residents and rescue teams cautioned that while tanks withdrew from some areas, Israeli snipers and tanks continued to control high ground at some locations, and warned residents from there against trying to return home.

“There are bodies scattered in the streets, dismembered bodies, there are bodies of entire families, there are also bodies inside a home of an entire family that was completely burned,” Gaza Strip Civil Defence spokesperson Mahmoud Basal said in comments carried by media in Hamas-run Gaza.

The Israeli military had said on Thursday that its forces were working to dismantle Hamas capabilities in Gaza City, and that it “follows international law and takes feasible precautions to mitigate civilian harm.” It said the same was not true of Hamas, which has denied hiding among civilians.

The armed wings of Hamas and Islamic Jihad said they had attacked Israeli forces anti-tank rockets and mortar fire, killing and wounding many. There has been no Israeli army comment on those claims.

Home to more than a quarter of Gaza’s residents before the war, Gaza City was largely razed to the ground in late 2023, but hundreds of thousands of Palestinians had returned to homes in the ruins before Israel once again ordered them out.

Dozens of residents returned again on Friday to check the damage after civil emergency teams put out fires in the early hours. Reuters footage showed roads and buildings wrecked. Bodies wrapped in white shrouds and bearing the names of the dead women and men lay on the floor at Al-Ahli Hospital.

Musa Al-Dahdouh recalled heavy aerial and tank fire and said Israeli forces had detained and interrogated his two sons and their wives and children before allowing them to leave.

“My mother is in a wheelchair, my wife as well, as she has metal in her arms and legs. My grandson is paralyzed in the legs, his father had to carry him on his back,” he said.

In Khan Younis in the southern Gaza, Hamas media said four people working for the Al-Khair Foundation, a Muslim NGO based in Britain and Turkey, were killed in an air strike at an aid distribution centre.

Arab mediators, backed by the United States, are trying to reach a ceasefire deal that would free Israelis held hostage by Hamas in return for many Palestinians jailed by Israel.

On Friday, a senior Hamas official blamed Israel for a failure to build on momentum created when the Islamist faction dropped a key demand in the U.S.-drafted ceasefire offer a week ago to clear the way for a deal.

“Israel hasn’t given a clear stance over Hamas proposal,” the official, who asked not to be named, told Reuters, accusing Israel of “stalling and wasting time.”

There was no immediate comment from Israel.

Israeli Prime Minister Benjamin Netanyahu said on Thursday he remained committed to the Gaza ceasefire framework and accused Palestinian militant group Hamas of making demands that contradicted it. Mr. Netanyahu did not say what those demands were.

Two Egyptian sources said on Thursday that talks had made progress but security arrangements and ceasefire guarantees were still being worked on.

Part of the discussion concerned an electronic surveillance system along the border between Gaza and Egypt that could allow Israel to pull back its troops from the area, according to two Egyptian sources and a third source familiar with the matter.

Israel dismissed the report as “absolute fake news” saying that Mr. Netanyahu insists that Israel remains in the area.

Hamas-led militants killed 1,200 people and took more than 250 hostages on Oct. 7, according to Israeli tallies. Since then, Israel’s forces have killed more than 38,000 Palestinians, medical authorities in Gaza say.

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