Israeli forces are now operating in the heart of Khan Yunis, southern Gaza's largest city, the Israel Defence Forces said on Tuesday.
'We are in the core of Jabaliya, in the core of Shejaya and now also in the core of Khan Yunis,' the IDF said in a statement.
Forces penetrated Khan Yunis on Monday, but the announcement was only made a day later.
In recent days, the IDF called on residents of certain areas of Khan Yunis to evacuate.
Khan Yunis is the second largest in the Strip and is considered the capital of Gaza's southern district.
It is also regarded as a personal stronghold of Hamas leader Yahya Sinwar, whose family lives there. Since the war began, the IDF has eliminated two members of the Hamas ruling politburo as well as associates of Sinwar, who live in Khan Yunis.
In the last few days, IDF fighters have been operating in Jabaliya and Shejaya, densely populated areas in northern Gaza that are Hamas strongholds.
On Tuesday morning, the military said it had completed its encirclement of Jabaliya and raided Hamas's General Security Headquarters inside the United Nations administered refugee camp.
Weapons, command and control equipment, observation gear and maps were located in the headquarters, it said.
During the last few days, infantry, armor, engineering and air force forces have been fighting terror squads in face-to-face encounters.
In addition, Israeli soldiers have uncovered and destroyed weapons, tunnel shafts and other terror infrastructure, including in and around civilian homes and schools, the IDF said.