Israeli war cabinet member Benny Gantz has warned that unless Hamas frees all hostages held in Gaza by 10 March an offensive will be launched in Rafah.
It is the first time Israel has said when its troops might enter Gaza's overcrowded southern city.
Global opposition is growing to such an attack in Rafah, where some 1.5 million Palestinians are sheltering.
Earlier, the World Health Organization said a key Gaza hospital had ceased to function following an Israeli raid.
Speaking on Sunday, Mr Gantz, a former defence minister, said: "The world must know, and Hamas leaders must know - if by Ramadan our hostages are not home, the fighting will continue everywhere, to include the Rafah area."
Ramadan - the Islamic holy month of fasting - begins on 10 March.
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