"Our fighters are currently engaged in heavy fighting with machine-guns and anti-tank weapons with the invading occupation (Israeli) forces in northwest Gaza," the Ezzedine al-Qassam Brigades said in a statement.
Earlier on Sunday, the Israeli army said it had increased the number of troops fighting inside the Gaza Strip as it stepped up its war on Hamas in the tiny coastal territory.
In a televised news conference on Saturday, Prime Minister Benjamin Netanyahu told the country that Israel has opened a "new phase" in the war – by sending ground forces into Gaza and expanding attacks from the ground, air and sea.
He said these activities would only increase as Israel prepares for a broad ground invasion into the territory. The goal, he said, is the complete destruction of Hamas.
Netanyahu described the war as a battle of good versus evil and a struggle for Israel's existence.
In an earlier statement, Hamas’s armed wing claimed two Israeli tanks had caught fire after they were targeted by its fighters, a claim which the army has not confirmed.
The Israeli army said troops had "identified a number of terrorists exiting the shaft of a tunnel" near the Erez border crossing and "confronted the terrorists, killing and injuring them".
The United States and other countries warned against the risk of the conflict spreading.
Iranian Foreign Minister Hossein Amirabdollahian on Sunday said Iran does not want war to "spread out" following the October 7 attacks by Hamas.
Netanyahu said he could not say that Iran was a partner in the October 7 attack, but that Tehran was responsible for years of funding, training and support for Hamas.
"Without Iran, there's no Hamas, just like there's no Hezbollah," he said.
Amirabdollahian dismissed claims directly connecting Iran to the attacks, calling them "baseless."
The Hamas-run Gaza Health Ministry said Saturday that more than 7,700 Palestinians have been killed so far while Israeli officials recorded over 1,400 deaths in the aftermath of Hamas' Oct 7 attack.
Some information in this report came from Reuters