Benjamin Netanyahu has said Israel can “stand alone” after the US warned it could halt arms shipments if the Israeli prime minister ordered a full-scale invasion of Rafah in Gaza.

“If we need to … we will stand alone. I have said that if necessary we will fight with our fingernails,” he said.

US President Joe Biden said he would withhold some arms including artillery shells if Rafah was invaded.

The US has already paused a shipment of bombs over fears of civilian deaths.

Mr Netanyahu on Thursday however recalled the war of 1948 to dismiss warnings from the US, Israel’s closest ally.

“In the War of Independence 76 years ago, we were the few against the many,” he said “We did not have weapons. There was an arms embargo on Israel, but with great strength of spirit, heroism and unity among us – we were victorious.”

He said that Israel had “much more than our fingernails” if Mr Biden stopped arms shipments.

Yoav Gallant, Mr Netanyahu’s defence minister, meanwhile said Israel’s “enemies as well as … best of friends” should understand that his country “cannot be subdued. We will stand strong, we will achieve our goals.”

The comments came hours after the UN said more than 80,000 people had fled Rafah since Monday amid constant bombardment and as Israeli tanks massed close to built-up areas.

The UN also warned that food and fuel were running out for the more than one million still sheltering in the city, because it was not receiving aid through nearby crossings.

Israeli troops took control and closed the Rafah crossing with Egypt at the start of their operation, while the UN said it was too dangerous for its staff and lorries to reach the reopened Kerem Shalom crossing with Israel.

Israeli forces said they were conducting “targeted raids” against Hamas elements remaining in the city. However, the Israeli government has refused to rule out a full scale invasion, leading to Mr Biden’s warning he would not supply it with the munitions to do so.

On Wednesday, Mr Biden told CNN that American bombs had been used to kill Palestinian civilians.

“If they go into Rafah, I’m not supplying the weapons that have been used historically to deal with Rafah,” he said.

White House national security spokesman John Kirby said Mr Biden did not believe “smashing into Rafah” would advance Israel’s objective of defeating Hamas.

“An enduring defeat of Hamas certainly remains the Israeli goal, and we share that goal with them,” Mr Kirby said.

“The argument that somehow we’re walking away from Israel, or we’re not willing to help them defeat Hamas just doesn’t comport with the facts,” he said.

Palestinian media said two people were killed on Thursday afternoon in an Israeli air strike in the al-Jneineh neighbourhood of Rafah – one of the eastern areas which the Israel Defense Forces (IDF) ordered residents to evacuate before beginning its ground operation began on Monday night.

Another three people were reportedly killed in an air strike in the nearby Brazil area, which is not in the evacuation zone but is next to the Egyptian border.

Hamas and Palestinian Islamic Jihad (PIJ) – which are proscribed as terrorist organisations by Israel, the US and other countries – said they were targeting Israeli forces on the eastern outskirts with mortar bombs and anti-tank missiles.

Hamas also said it had blown up a booby-trapped tunnel east of Rafah underneath three Israeli military vehicles. The IDF said three of its soldiers were moderately wounded as a result of the explosion.

Overnight, at least five people were reportedly killed when a family’s home in the western Tal al-Sultan neighbourhood was hit in an Israeli strike. They included three children, one of them a one-year-old infant, medics said.

Meanwhile hopes of a peace deal – which seemed close earlier in the week before Israel said it did not past muster – appeared to be fading. Both Israeli and Hamas delegations left indirect talks in Cairo on Thursday.

After seven months of war in Gaza, Israel insists victory is impossible without taking the city of Rafah and eliminating the last remaining Hamas battalions.

Israel launched a military campaign in Gaza to destroy Hamas in response to the group’s attack on southern Israel on 7 October, during which about 1,200 people were killed and 252 others were taken hostage, according to Israeli authorities.

More than 34,900 people have been killed in Gaza since then, according to the territory’s Hamas-run health ministry.

Israel says 128 hostages are unaccounted for, 36 of whom are presumed dead.