Thousands of Palestinians living in the southern Gaza Strip town of Rafah, which borders Egypt, evacuated their homes on Wednesday after Israeli army warnings, local residents said.

One of the residents said Israeli warplanes showered the town with hundreds of leaflets asking the population in the town to evacuate so that they would not be in danger.

A witness said dozens of families, including women and children, were seen leaving their homes and heading north towards nearby neighborhoods in the town, in fear that their homes might be bombarded by Israeli warplanes.

Palestinian security sources said Israeli warplanes had earlier destroyed around 26 houses, which were believed to have tunnels underground.

Meanwhile, Ghazi Hamad, former spokesman for Hamas government, told reporters that Israel has been destroying dozens of residential houses in Rafah town.

Israel said the Hamas movement has been using dozens of tunnels to smuggle weapons and other kinds of goods into the besieged Gaza Strip sandwiched between Egypt and the Jewish state. Hamas said the tunnels were dug to defy a two-year blockade imposed on the enclave.

"The Israeli missiles are destroying the homes of the residents in Rafah. They (Israelis) are turning the area into a testing field of all kinds of air-to-ground missiles," said Hamad.

Israel has been carrying out an ongoing military offensive on the Gaza Strip since December 27, leaving more than 700 people killed and over 3,000 wounded, and destroying dozens of buildings and the infrastructure.

Hamad said he is optimistic that a ceasefire would be reached within this week or early next week, adding that "the Egyptian and French efforts are so serious to stop the aggression on the Gaza Strip."