Israeli forces stormed the Nasser Hospital in Khan Younis city in the southern Gaza Strip, the military said on Thursday.
A military statement said special forces are operating inside the medical facility.
"This operation is based on intelligence information indicating the presence of Hamas activities inside the hospital," it claimed.
The army said a number of suspects have been detained at the hospital.
The Israeli army has laid a siege around the hospital and ordered the evacuation of the complex.
The army reportedly gave thousands of displaced Palestinians inside the complex until 7:00 a.m. local time (5:00 GMT) to evacuate the hospital, according to witnesses.
Palestinian Health Minister Mai Alkaila warned early Thursday of an imminent humanitarian catastrophe at the hospital amid an Israeli raid on the facility.
Since Jan. 22, Khan Younis has witnessed a massive Israeli ground invasion, forcing tens of thousands of the city's residents to flee under heavy Israeli bombardment.
Israel has pounded the Gaza Strip since an Oct. 7 Hamas attack, killing at least 28,663 and causing mass destruction and shortages of necessities. Nearly 1,200 Israelis are believed to have been killed in the Hamas attack.
The Israeli war on Gaza has pushed 85% of the territory's population into internal displacement amid acute shortages of food, clean water and medicine, while 60% of the enclave's infrastructure has been damaged or destroyed, according to the UN.
Israel stands accused of genocide at the International Court of Justice, which in an interim ruling in January ordered Tel Aviv to stop genocidal acts and take measures to guarantee that humanitarian assistance is provided to civilians in Gaza.
