Israel said two Israeli-Argentinian hostages have been rescued in a raid in Rafah, amid heavy Israeli air strikes on the southern Gazan city.
The Israeli military said the two men were in “good medical condition”.
The pair were named as Fernando Simon Marman, aged 60, and Louis Har, 70, from Kibbutz Nir Yitzhak.
Some 1.5 million people are sheltering in Rafah. The Hamas-run health ministry said dozens had been killed in the overnight strikes.
It follows warnings from the international community over Israel’s planned offensive in the city.
The hostages were found on the second floor of a building in Rafah, said Rear Admiral Daniel Hagari, a spokesman for the Israel Defense Forces (IDF).
He said Israeli forces had engaged in “heavy exchanges of fire at several locations simultaneously, with many terrorists”.
Abou Suhhaib, who lives in the Shaboura neighbourhood in Rafah, heard “heavy shooting” and “strong explosions” overnight.
“At approximately midnight, we heard the sounds of strong explosions, as if hell had opened on the civilians,” he told AFP news agency.
He described seeing a helicopter landing, adding, “there was heavy shooting, as if it was a very big battle”.
There are conflicting reports on Palestinian casualties from the air strikes: the AFP news agency reported that “around 100 people” were killed, citing Gaza’s Hamas-run health ministry. Meanwhile, the Associated Press reported that at least 50 people were killed, quoting local hospital officials.