The armed wing of Hamas has said three of eight Israeli hostages who were seriously injured following Israeli air strikes had died from their wounds.
"We will postpone the announcement of the names and pictures of the dead for the coming days until the fate of the remaining wounded becomes clear," the Al Qassam Brigades said in a statement.
It comes as at least 67 people were killed during an Israeli special forces operation under the cover of airstrikes that freed two Israeli hostages in Rafah early this morning, according to local health officials.
A joint operation by the Israel Defence Force (IDF), Israel's domestic Shin Bet security service and the Special Police Unit in Rafah freed Fernando Simon Marman, 60, and Louis Har, 70, the Israeli military said.
The two men were kidnapped by Hamas from Kibbutz Nir Yitzhak on 7 October, the military said.
"It was a very complex operation," Israeli military spokesman Lieutenant Colonel Richard Hecht said. "We've been working a long time on this operation. We were waiting for the right conditions."
The hostages were being held on the second floor of a building that was breached with an explosive charge during the raid, which saw heavy exchanges of gunfire with surrounding buildings, Lt Col. Hecht said.
"I'm very happy to announce that this night two released hostages landed here at Sheba medical centre, Israel's largest hospital," said Prof Arnon Afek, director of Sheba general hospital.
"They were received in our ER and initial examinations were conducted by our ER staff and they are in a stable condition and being tended to."
Speaking from Sheba hospital where the two men were undergoing medical checks, Mr Har's son-in-law described "a lot of tears, hugs, not many words" when the family was reunited.
"Luckily for us, as a family, they were saved tonight. But I must say that the job is not done," Idan Bejerano told journalists at Sheba hospital.
"We are happy today, but we didn't win. It's just another step towards bringing all the other" hostages home, he continued.
Talks have been under way for weeks to secure a second truce in the four-month war, which would see more hostages freed in exchange for the release of Palestinian prisoners held in Israel.
But Israeli Prime Minister Benjamin Netanyahu has vowed to press on with the fight into Rafah, sparking international alarm for the 1.4 million Palestinians taking refuge there.
Israeli military said last night's air strike on Rafah coincided with the raid to allow its forces to be extracted.
The strikes killed at least 67 Palestinians and wounded dozens, a spokesman for the Health Ministry in Gaza Ashraf Al-Qidra said this morning.
The air strikes caused widespread panic in Rafah as many people were asleep when the strikes started, said residents contacted by Reuters. Some feared Israel had begun its ground offensive into Rafah.
Israeli planes, tanks and ships took part in the strikes, with two mosques and several houses hit, according to residents.
Hamas said in a statement that the attack on Rafah was a continuation of a "genocidal war" and forced displacement attempts Israel has waged against the Palestinian people.
A week-long truce in November secured the release of more than 100 Gaza hostages, in exchange for 240 Palestinians held in Israel.
Among those who had been released as part of that deal was Clara Marman, the partner of Louis Har and sister of Fernando Marman, as well as her sister Gabriela Leimberg and her 17-year-old daughter Mia Leimberg, according to the Hostages and Missing Persons Families Forum campaign group.
Speaking hours after his Israeli-Argentinian relative was freed, Mr Bejerano urged leaders to "be serious and strike a deal".
"The Israeli people need the deal done. Not yesterday, not tomorrow, today. We want it done as soon as possible," he said.
Aid agencies say an assault on Rafah would be catastrophic. It is the last relatively safe place in an enclave devastated by Israel's military offensive.
Mr Biden and Mr Netanyahu spoke for about 45 minutes, days after the US leader said Israel's military response in Gaza had been "over the top" and expressed grave concern over the rising civilian death toll in the Palestinian enclave.
Mr Netanyahu's office has said that it had ordered the military to develop a plan to evacuate Rafah and destroy four Hamas battalions it says are deployed there.
Hamas militants killed 1,200 people in southern Israel and abducted at least 250 in their 7 October incursion, according to Israeli tallies. Israel has responded with a military assault on Gaza that has killed more than 28,000 Palestinians, according to the Hamas-run health ministry.
Mr Netanyahu said in an interview aired yesterday that "enough" of the 132 remaining Israeli hostages held in Gaza were alive to justify Israel's war in the region.
Hamas-run Aqsa Television yesterday quoted a senior Hamas leader as saying any Israeli ground offensive in Rafah would "blow up" the hostage-exchange negotiations.
Egypt warned yesterday of "dire consequences" of a potential Israeli military assault on Rafah, which lies near its border.
"Egypt called for the necessity of uniting all international and regional efforts to prevent the targeting of the Palestinian city of Rafah," its foreign ministry added in a statement.
