Defence Minister Yoav Gallant said "additional forces will enter" the Rafah area and "this activity will intensify".
"Hundreds of targets have already been struck and our forces are manoeuvring in the area," Gallant said following a troop visit on Wednesday.
Israel's top ally the United States has joined other major powers in appealing for it to hold back from a full ground offensive against Hamas in Rafah, the last city in Gaza so far spared heavy urban fighting.
Prime Minister Benjamin Netanyahu has countered that a ground assault on Rafah is vital to the army's mission of destroying Hamas to prevent any repetition of the October 7 attack that triggered the war.
Speaking on Wednesday, the premier said nearly half a million Palestinian civilians had already been evacuated from Rafah and argued that a much-feared humanitarian disaster had not materialised.
Many have fled to the coastal area of Al-Mawasi that Israel has declared a "humanitarian zone", and satellite images show a vast new tent city has sprung up near the main southern city of Khan Yunis.
Many of those fleeing Rafah are "exhausted, they are scared, they don't have resources", said Javed Ali, head of emergency response in Gaza for International Medical Corps.
Ali, who works at a field hospital in Al-Mawasi and is an aid veteran of multiple war zones, said the situation in Gaza was "far more catastrophic" than anything he had seen before.
"The immense number of trauma cases, the lack of resources, the interrupted supply chain... It's something that I've never seen."
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