Israel's military said it demolished a tunnel on Sunday stretching from Gaza into its territory in an operation that comes at a time of increased tension over US President Donald Trump's recent Jerusalem declaration.

Military spokesman Jonathan Conricus said intelligence showed the tunnel belonged to Hamas, which runs the Gaza Strip. Israel was not aware of any casualties, he said.

It was the second such operation in recent weeks, with the last tunnel destroyed on October 30.

Such tunnels have been used in the past to carry out attacks. The tunnel destroyed on Sunday had been discovered several weeks ago and was monitored by the military, Conricus said.

According to Conricus, the tunnel stretched from the area of the city of Khan Yunis in the southern Gaza Strip to hundreds of metres inside Israeli territory.

He declined to specify the exact location in Israeli territory and an exit point had not yet been created for the tunnel.

“We see this as a severe violation of Israeli sovereignty,” Conricus told journalists, while adding that Israel was not seeking an escalation.

He also stressed the tunnel had been in the works for some time and was not linked to the recent clashes and protests over last week's declaration of Jerusalem as Israel's capital by Trump.