-Israel launched an assault overnight on Gaza's main northern city weeks after pulling back from there, residents said, while Washington considered its response to the first deadly strike on its forces in the Middle East since the Gaza war began.

Three U.S. servicemen were killed and at least 34 wounded in a drone attack by Iran-backed militants in northeastern Jordan near the Syrian border, U.S. Central Command said on Sunday, an escalation in the violence that has erupted beyond Gaza.

U.S. President Joe Biden said the attacks were carried out by radical Iran-backed militant groups operating in Syria and Iraq. Iran denied any role, but the first fatalities in what have been scores of attacks on U.S. forces in the Middle East since the Israel-Hamas war broke out prompted calls from U.S. politicians for a direct response.

Biden has ordered retaliatory attacks on Iranian-backed groups but has stopped short of hitting Iran directly for fear of igniting a broader war amid violence that has already hampered global trade through attacks on ships in the Red Sea.

"Have no doubt - we will hold all those responsible to account at a time and in a manner of our choosing," he said on Sunday.

Inside Gaza, residents said air strikes on neighbourhoods across Gaza City killed and wounded many people. While tanks shelled the eastern areas of the city, naval boats fired shells and gun rounds at the beachfront areas in the west, they said.

Israel said late last year that it had largely completed operations in northern Gaza. The push back into Gaza City, where residents reported fierce gun battles near the main Al-Shifa hospital, indicated that the war was not going to plan.

Among those killed were two Palestinian journalists, Essam El-lulu and Hussein Attalah, along with several members of their families, health officials and the journalist union said.

GAZANS SAY ISRAEL IS IGNORING THE WORLD COURT

Gazans said the renewed violence made a mockery of a ruling by the World Court calling on Israel to do more to help civilians. Health officials say 26,637 Palestinians have been killed in the conflict with thousands more bodies likely under the rubble of destroyed buildings across the coastal territory.

"The war continues in a dirtier manner," said Gaza City resident Mustafa Ibrahim, a Palestinian human rights activist now displaced with his family in Rafah near the southern border with Egypt, along with more than a million other Gazans.

Israel, which blames Hamas for the deaths of civilians, ordered new evacuations of the most populated areas of Gaza City, but people said communications blackouts meant many would miss them.

People in the north have been grinding animal feed to make flour after flour, rice and sugar ran out, part of an aid crisis now exacerbated by a withdrawal of support for the United Nations' aid agency for Palestinian refugees, UNRWA.

The United States and another major donor, Germany, are among countries to have suspended aid to the agency since Friday after Israel said 12 of UNRWA's 13,000 staff in Gaza were involved in the Oct. 7 Hamas attacks on Israel which killed about 1,200 people.

The Israeli report, seen by Reuters, said 190 UNRWA staff were also militants, naming 11.

UNRWA, which says more than 150 of its staff have been killed since October, said it would have to end operations within a month if funding was not restored.

Air strikes also hit the southern city of Khan Younis. Israel said that four among dozens of Palestinian gunmen it had killed in the past 24 hours had been preparing to ambush troops near Al-Amal hospital.

People fled south on foot carrying children and bedding. Suleiman Abusari, in a wheelchair pushed by his father, said his legs were amputated after an Israeli drone hit him.

"My dream was to play football," he said. "They stole my dream."

In the middle of Gaza, health officials said 13 Palestinians were killed in the Al-Rimal neighborhood after Israeli forces stormed a shelter for displaced people.

'NOT OVER THE FINISH LINE'

Mindful of the growing risks of a wider conflagration, Biden and other leaders have been pushing for a new temporary ceasefire to allow for the release of hostages held by Hamas and get more aid into Gaza as a prelude to a permanent truce.

Talks on Sunday initiated by Qatar and involving U.S., Israeli and Eygptian intelligence chiefs were "constructive", Israel said, while adding that "significant gaps" remain.

White House national security spokesman said there was a framework for a hostage deal, adding: "We're not over the finish line right yet."

Two far-right ministers in Israel's ruling coalition called on Sunday for Israel to reestablish settlements in Gaza, a plan that drew condemnation from Germany.

Hamas has demanded a guaranteed end to Israel's offensive in Gaza and full withdrawal before it frees the more than 100 people still held in Gaza, out of 253 seized when militants attacked Israeli bases and towns on Oct. 7.

Violence has also engulfed the occupied West Bank, where the Palestinian health ministry said five people were killed by Israeli forces in four incidents in 24 hours. The Israeli military said three were in response to attempted gun, knife or stone-throwing attacks on its soldiers.

Within Israel, the military said an unidentified motorist in Haifa rammed a soldier and then tried to attack him with an axe before being shot.

In neighbouring Syria, two people were killed and several wounded in an Israeli attack on the outskirts of the Syrian capital, Iranian and Syrian media said, with Iran's ambassador to Damascus denying reports the location was an Iranian military post. Israel has a longstanding reputation for attacks on Iran-linked targets in Syria. An Israeli military spokesperson declined to comment.