Palestinian families grabbed their children and belongings and fled neighborhoods on the outskirts of Gaza City as Israel unleashed heavy artillery fire and airstrikes.

A family of six was killed inside their home.

Israel says it was clearing a network of militant tunnels ahead of a possible ground invasion.

It has massed troops along the border and called up nine-thousand reservists as fighting intensifies with the Islamic militant group Hamas, which controls the Gaza Strip.

Israeli aircraft have leveled a multistory building housing a bank affiliated with the Hamas militant group in Gaza City.

It was the third Hamas bank destroyed in Israeli airstrikes in this week's deadly escalation and fighting.

The Israeli military also said on Friday that it had struck Hamas weapons production and naval sites in recent strikes on the Gaza Strip.

The Hamas armed wing released a video showing what they said was a drone attack the group launched targeting an Israeli chemical plant near a kibbutz in southern Israel.

There was no immediate comment from the Israeli army on the drone attack.