Israel will begin to implement daily four-hour military pauses in areas of northern Gaza, US National Security Council spokesman John Kirby said.
However Israel's defence minister stressed they were only "localised and pinpoint measures" that would "not detract from the war fighting".
President Biden said there would be two "humanitarian passages" allowing people to leave areas of fighting.
On Thursday heavy fighting was reported around two big hospitals in Gaza City.
Meanwhile, pictures once again showed thousands of Palestinians fleeing south from the city and other northern areas.
Mr Biden also said the US was trying to increase humanitarian supplies and assistance to Gaza. He said he was aiming for 150 trucks of aid per day to enter the territory.
However the UN said the amount of aid entering Gaza was only meeting "a fraction" of people's needs and the humanitarian situation was "intolerable". A conference in Paris earlier heard repeated appeals for a ceasefire in Gaza.
Israel has been bombarding Gaza for over a month and began a major ground offensive almost two weeks ago with the objective of destroying Hamas, which it, the US and other Western powers consider a terrorist organisation.
The war began after an unprecedented cross-border assault on southern Israel by Hamas gunmen on 7 October, in which 1,400 people were killed and 240 others taken hostage.
Gaza's Hamas-run health ministry says 10,800 people have been killed in the territory since then, while 1.5 million have fled their homes.
Mr Biden said Israel was "fighting an enemy embedded in the civilian population, which places innocent Palestinian people at risk" but that Israel had "an obligation to distinguish between terrorists and civilians and fully comply with international law".
On Thursday the Israel Defense Forces (IDF) said it had raided Hamas's "military quarter" near Al-Shifa Hospital and killed 50 "terrorists".
A witness said he had also seen tanks opening fire near Al-Quds Hospital.
About 2,000 patients and 50,000 displaced people are said to be inside Al-Shifa Hospital, which is located in Gaza City's northern Rimal neighbourhood and is the largest medical complex in Gaza.
Its director, Mohammed Abu Selmia, told the Associated Press that Israeli troops were about 3km (2 miles) away and that conditions there were "disastrous in every sense of the word".
In footage filmed inside the hospital on Thursday, a man who was accompanied by two children tells a journalist that they had been walking on a street, trying to flee south, when an Israeli tank opened fire at them.
"The remains of seven or eight martyrs were left at the scene," he says.
An unverified video posted on social media overnight also purportedly showed a number of people being helped after being hit by shrapnel from a shell on a street close to Al-Shifa.
The IDF has previously alleged that Hamas is also operating underground command centres beneath Al-Shifa itself. Hamas and hospital staff have denied the accusation.
Fierce battles were also reported on Thursday around Al-Quds hospital, which is 2.3km (1.4 miles) to the south-west in the Tal al-Hawa neighbourhood.
Hamouda Musa, 34, told the BBC he and his neighbour had escaped from a building opposite the hospital after he saw four tanks and a bulldozer advancing from the coast, 1km away to the north.
"They were firing intensely towards a nearby residential building," he said. "We fled under a barrage of bullets via a back street. We miraculously came back from the dead."
On Wednesday, the Palestinian Red Crescent said that areas in close proximity were struck, injuring patients and displaced people, and damaging buildings.
The hospital also said on Wednesday that its main generator had been shut down because of a shortage of fuel, forcing it to close its surgical ward, oxygen generation plant and MRI ward.
The clashes and strikes in the north, as well as the struggle to secure enough drinking water and food to survive, has prompted some of the several hundred thousands of civilians staying there to flee southwards in recent days.
Pictures from drones showed a stream of people walking along Salah al-Din Road and crossing the Wadi Gaza river, after the IDF opened the route for a sixth consecutive day.
An estimated 50,000 people fled the north on Wednesday, which was 10 times more than on Monday.
Although the IDF has ordered civilians to move south of Wadi Gaza for their own safety, it has continued to carry out strikes on what it says are Hamas targets in areas where hundreds of thousands have sought refuge.
The Hamas-run interior ministry in Gaza said 12 people had been killed and many more injured in an Israeli air strike on a house in the central town of Deir al-Balah on Thursday. There was no immediate comment from the IDF.
While visiting Egypt's Rafah Crossing with Gaza on Wednesday, UN human rights chief Volker Türk said both sides in the conflict had committed war crimes.
"The atrocities perpetrated by Palestinian armed groups on 7 October were heinous, they were war crimes - as is the continued holding of hostages."
"The collective punishment by Israel of Palestinian civilians amounts also to a war crime, as does the unlawful forcible evacuation of civilians. The massive bombardments by Israel have killed, maimed and injured in particular women and children," he added.
Israel has insisted it has been acting in complete compliance with international law and that it has done everything possible to minimise civilian casualties.
It has also rejected the UN's warnings of a humanitarian crisis in Gaza, arguing that there is sufficient food, water and fuel despite the "complete siege" it imposed in response to Hamas's attack, and has rejected its calls for a ceasefire unless the hostages are released.
The head of the UN agency for Palestinian refugees (Unrwa), Philippe Lazzarini, told the Paris conference on Gaza that there had to be a ceasefire so that more aid could be delivered.
He called the volume currently coming through Rafah "blatantly inadequate".
A total of 756 lorries have crossed from Egypt since 21 October. Before the war, an average of 500 lorry loads entered Gaza every working day from Egypt and Israel.