The Israeli army ordered Palestinians to leave Khan Younis ahead of a possible new assault, underscoring its struggle to stop militants regrouping in areas that were previously cleared.

The Israel Defense Forces warned people in eastern neighborhoods of Gaza’s second-biggest city to evacuate. The military said warplanes hit the area overnight after 20 rockets were fired toward Israel. While there were no injuries among Israelis, it was one of the worst missile barrages from Gaza in weeks.

Israeli ground forces began fighting in Khan Younis late last year and by February said they’d mostly defeated Hamas’ military units there. Israel pulled some troops out in April and said it was ending its mission.

The city has largely been reduced to rubble but some residents had moved back in the past two months, and Israel’s evacuation order was met with anger.

“Where shall we go?” said Ahmed Al-Shami, who’s in Khan Younis. He said hundreds of people spent the night on the street with their belongings because they could not find transportation to leave.

Another inhabitant, Kholoud Abu Baraka, said she and her family managed to reach Al-Mawassi, an area designated a safe zone by Israel, but it was too crowded to pitch their tent.

Many Palestinians are gathering near the Nasser hospital in the west of Khan Younis.

The IDF has tended to quickly move troops out of areas in Gaza that it’s cleared of fighters belonging to Hamas or other groups such as Islamic Jihad. While that’s part of a strategy to avoid occupying cities in the Mediterranean enclave, the U.S. and others warn it’s creating a power vacuum and allowing militants to reassemble.

One June 23, Israeli Prime Minister Benjamin Netanyahu said fighting in the southern city of Rafah would be over “very soon.” Yet while Israel had presented that as the last major battle in Gaza, its officials have said Hamas won’t be fully defeated before the end of the year.

The IDF’s latest moves in Khan Younis come as tensions worsen with Hezbollah, another Iran-backed group. U.S. Secretary of State Antony Blinken on Monday said there’s “momentum” toward a full-on conflict between Israel and the Lebanon-based militants, which Washington and Paris are trying to prevent.

Hezbollah, like Hamas, is designated a terrorist organization by the U.S. It’s considered the most powerful militia in the Middle East and a war with Israel would likely draw in the U.S. as well as Iran, which sees the group as more important than Hamas.

Tehran would support Hezbollah both directly and via other allied militias in the region in the event of a full-blown conflict, Kamal Kharrazi, foreign affairs adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei, said in an interview with the Financial Times.

“There would be a chance of expansion of the war to the whole region, in which all countries including Iran would become engaged,” he said.

Israeli assets have weakened in the past two weeks as the prospect of a new war has increased. The government’s dollar bonds are among the worst performing in emerging markets, while the shekel is trading around a 10-week low.

Israel and Hezbollah have been trading fire almost daily since Hamas’ attack on southern Israeli communities on Oct. 7. Hamas killed around 1,200 people and taking 250 hostage. Almost 38,000 Palestinians have been killed in Gaza since Israel began an air and ground offensive, according to the Hamas-run health ministry.