The United States has issued a stunning criticism of Israel's use of American weapons in the Gaza war, after Israeli forces intensified operations around the southern city of Rafah, where more than a million displaced people are sheltering.

Israel's main international ally said in a report released on Friday that it was "reasonable to assess" that Israel has used weapons in ways inconsistent with international humanitarian law during the seven-month war.

But the long-awaited State Department report said it could not reach "conclusive findings" and stopped short of blocking weapons shipments.

Relations between the two allies soured earlier in the week after US President Joe Biden said he would halt some arms deliveries if Israel went ahead with a full-scale assault on Rafah threatened by Prime Minister Benjamin Netanyahu.

The US has warned that the reputational damage Israel will suffer if it storms a city where an estimated 1.4 million civilians are sheltering will far outweigh any possible military gain.

UN chief Antonio Guterres said on Friday that Gaza risked an "epic humanitarian disaster" if Israel launched a full-scale ground operation in Rafah, while France urged Israel to cease its operations in Rafah "without delay".

The Israeli premier has said repeatedly that Israel cannot defeat Hamas and eliminate any possibility of the militant group repeating its bloody October 7 attack without sending ground troops into Rafah in search of remaining Hamas fighters.

Netanyahu struck a defiant tone on Thursday, vowing: "If we have to stand alone, we will stand alone."

The White House renewed its opposition on Friday but said it saw no major operation yet against the city.

"We're obviously watching it with concern, of course, but I wouldn't go so far as to say what we've seen here in the last 24 hours connotes or indicates a broad, large (or) major ground operation," National Security Council spokesman John Kirby told reporters.

Earlier this week, Israeli ground troops seized eastern areas of the city, including the Palestinian side of the Rafah border crossing between Egypt and Gaza, but they have yet to enter its main built-up area. (AFP)