The UN agency for Palestinian refugees warned Thursday it has reached a critical juncture as it struggles to cope with the war in Gaza.

"It is with profound regret that I must now inform you that UNRWA has reached a breaking point," chief Philippe Lazzarini said, as donors freeze funding, Israel exerts pressure to dismantle the agency and humanitarian needs soar.

"The Agency's ability to fulfill the mandate given through General Assembly resolution 302 is now seriously threatened," he said in a letter to the assembly.

G20 nations broadly back a two-state solution to the conflict in the Middle East, host Brazil said Thursday after a meeting of top diplomats, adding to pressure on Israel to accept an independent Palestinian state.

The message from the meeting of G20 foreign ministers in Rio de Janeiro came a day after Israel's parliament overwhelmingly voted for a proposal by Prime Minister Benjamin Netanyahu to oppose any "unilateral" recognition of a Palestinian state.

The Israel-Hamas war has had a "catastrophic" impact on Gaza's infrastructure and caused its economy to contract by more than 80 percent in the fourth quarter of the year, the World Bank said.

The ongoing conflict has caused widespread damage and destruction across Gaza, and caused a "massive loss of life," the Bank said a statement.

The October 7 Hamas attack resulted in the deaths of about 1,160 people in Israel -- mostly civilians -- according to an AFP tally of Israeli official figures.

Two Hezbollah fighters were killed in an Israeli drone strike on a residential building in south Lebanon on Thursday, a security source said, with the Iran-backed group later announcing retaliatory rocket fire.

Hezbollah and its arch-foe Israel have been exchanging near-daily fire across the border since the Israel-Hamas war broke out on October 7.

An Israeli drone shot two guided missiles at the building in Kfar Rumman, near the southern city of Nabatiyeh, the security source said, declining to be identified as they were not authorised to brief the media.

Candidates running for seats in Iran's legislature launched Thursday their election campaigns, one week ahead of polls expected to tighten conservatives' grip on power.

Voters are due to cast their ballots on March 1 to pick new members of Iran's parliament, as well as the Assembly of Experts, a key body in charge of appointing the country's supreme leader.

The upcoming election will be the first since months-long nationwide protests rocked Iran following the September 2022 death in police custody of Mahsa Amini, a 22-year-old Iranian Kurd.

A cargo ship abandoned in the Gulf of Aden after an attack by Yemeni rebels is taking on water and has left a huge oil slick, in an environmental disaster that US Central Command said Friday could get worse.

Rubymar, a Belize-flagged, British-registered and Lebanese-operated cargo ship carrying combustible fertilizer, was damaged in a Sunday missile strike claimed by the Iran-backed Huthi rebels.

Its crew was evacuated to Djibouti after one missile hit the side of the ship, causing water to enter the engine room and its stern to sag, said its operator, the Blue Fleet Group.

Three Palestinian gunmen killed one person and wounded eight, including a young pregnant woman, in a "terror attack" Thursday near a Jewish settlement in the occupied West Bank, Israeli police said.

The shooters were "neutralised", police said, and an AFP photographer later saw two bodies at the scene of the attack on a highway east of Jerusalem, where five cars were riddled with bullets.

Israel launched deadly air strikes on Rafah on Thursday, after threatening to send troops in to hunt for Hamas militants in the southern Gaza city where around 1.4 million Palestinians have sought refuge.

Another 97 people were killed over the past 24 hours in Hamas-run Gaza, the health ministry said, as a US envoy was in Israel for fresh efforts to secure a truce.

International concern has spiralled over the territory's escalating civilian death toll and the desperate humanitarian crisis sparked by the war that followed Hamas's October 7 attack against Israel.

Governments around the world are "reaching beyond their borders" to attack their own citizens abroad in order to crush dissent, Human Rights Watch said Thursday, urging more protection for them.

The New York-based rights group said so-called "transnational repression" was having a "chilling effect" on political criticism and called on countries and international organisations to take action.

"Methods... include killings, abductions, unlawful removals, abuse of consular services, the targeting and collective punishment of relatives, and digital attacks," an HRW report said.

It's common to hear residents chatting in Arabic just as often as English in this Detroit suburb's stores or mosques, those buildings themselves often sporting bilingual signage out front.

But no matter the language, residents in this Arab American and Muslim stronghold in the Midwestern state of Michigan are convinced President Joe Biden, as he steadfastly stands by Israel in its war in Gaza, is not listening to them.

"Vote for Palestine. No Biden," political organizer Samra'a Luqman says in English, passing out fliers outside a mosque after prayers.