An image depicting Noa Argamani, one of the four Israeli hostages rescued, is held up as Israeli activists rally during a demonstration calling for the return of hostages held in the Gaza Strip

Israelis on Sunday cheered the rescue of four hostages from war-torn Gaza while Palestinians counted the cost, with Palestinian officials saying 274 people were killed and hundreds wounded during the daytime raid.

Special forces fought gun battles with Palestinian militants on Saturday in central Gaza's crowded Nuseirat refugee camp area as they swooped in to free the captives from two buildings and then flew them out by helicopters.

The Israeli military said the extraction team and captives came under heavy gun and grenade fire, which killed one police officer, while Israel's air force launched strikes that reduced nearby buildings to rubble.

The health ministry in the Hamas-run territory said 274 people were killed and 698 wounded, in what it labelled the "Nuseirat massacre", figures that could not be independently verified.

Among those were at least 64 children, 57 women and 37 elderly people, the ministry said.

"My child was crying, afraid of the sound of the plane firing at us," said one Gaza woman, Hadeel Radwan, 32, recounting how they fled the intense combat as she carried her seven-month-old daughter.

"We all felt that we wouldn't survive," she told AFP, condemning "this brutal occupation that will not let us live".

Noa Argamani, 26, Almog Meir Jan, 22, Andrey Kozlov, 27, and Shlomi Ziv, 41, had been abducted from the Nova music festival during Hamas's October 7 attack.

Many Israelis shed tears of joy when they heard of the release of the four captives, all reported in good health.

The army released footage of the freed captives embracing their family members, and the government press office showed Prime Minister Benjamin Netanyahu visiting them in hospital.

But Meir Jan's joy at being released was undercut by the death of his father of a heart attack just one day earlier.

Israel's leading dailies, Yedioth Ahronoth and Israel Hayom, showed Argamani embraced by her father on their front pages under the same simple headline: "Home".

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- Renewed clashes -

Hamas's armed wing, the Ezzedine Al-Qassam Brigades, claimed that other hostages were killed during the rescue operation, and warned that conditions would worsen for the remaining captives.

"The operation will pose a great danger (for) the enemy's prisoners and will have a negative impact on their conditions," spokesman Abu Obaida wrote on the Telegram channel.

Israel's top diplomat rejected accusations "of war crimes" in the operation.

"We will continue to act with determination and strength, in accordance with our right to self-defence, until all of the hostages are freed and Hamas is defeated," Foreign Minister Israel Katz said.

Seeking to explain the civilian toll and damage from the raid, Israeli military spokesman Peter Lerner told US network ABC that forces "came under fire from a 360-degree threat. RPGs, AK-47s, explosive devices on the way, mortar rounds. It was and is a war zone."

Subsequent fighting saw four members of one family killed when an air strike hit their house in Gaza City's Al-Daraj area, in the territory's north, according to Al-Ahli hospital medics.

Israeli helicopters were also firing east of the Bureij camp, near Nuseirat, witnesses told AFP.

And heavy artillery shelling from Israeli army tanks hit central and northern areas of Rafah, said officials in the southern city.

The four freed hostages are among only seven that Israeli forces have managed to rescue alive since Palestinian militants seized 251 in their October 7 attack.

Dozens were exchanged in a November truce for Palestinian prisoners. After Saturday's rescue operation, 116 hostages remain in Gaza, although the army says 41 of them are dead.

European Union foreign policy chief Josep Borrell welcomed the hostage release and said reports "of another massacre of civilians are appalling... the bloodbath must end immediately".

- Blinken heads to Middle East -

United States President Joe Biden on May 31 launched a new push for a ceasefire and hostage release deal involving US, Qatari and Egyptian mediators, but without any tangible results so far.

Hamas has insisted on a permanent truce and full Israeli withdrawal from all parts of Gaza -- demands that Israel has firmly rejected.

Hamas's Qatar-based chief Ismail Haniyeh on Sunday condemned the "horrific massacre" in Nuseirat and insisted that "any agreement reached must include a permanent cessation of aggression, a complete withdrawal from the strip, an exchange deal and reconstruction".

US Secretary of State Antony Blinken will visit the Middle East from Monday for his eighth regional tour since the October 7 attack, with stops planned in Israel, Egypt, Jordan and Qatar.

Blinken on Saturday again insisted that "the only thing standing in the way of achieving this ceasefire is Hamas. It is time for them to accept the deal."

In an interview with US broadcaster CBS, National Security Advisor Jake Sullivan said "my hope is that by the time the Israeli prime minister comes to address Congress, which will be near the end of July, that we will have in place this ceasefire and hostage deal".

The bloodiest ever Gaza war broke out after the October 7 attack on southern Israel that resulted in the deaths of 1,194 people, mostly civilians, according to an AFP tally based on Israeli official figures.

Israel's retaliatory military offensive has killed at least 37,084 people in Gaza, also mostly civilians, according to the territory's health ministry.

"This horror must stop," UN chief Antonio Guterres said on Saturday, when he detailed that 135 workers of the UN agency for Palestinians had died in the war, the world body's highest toll in any conflict.

The war has brought widespread devastation to Gaza and displaced most of its 2.4 million inhabitants, many whom are on the brink of starvation.

Aid has arrived only sporadically by truck, airdrops and sea.

The US military said a temporary pier that had suffered storm damage late last month had been rebuilt and used on Saturday to deliver about 492 tonnes of "much needed humanitarian assistance".

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Gaza health ministry says Israeli hostage rescue killed 274 Palestinians

The Hamas-run health ministry in Gaza says an Israeli raid on a refugee camp - which led to the rescue of four hostages - killed 274 people including children and other civilians.

On Saturday Israel's forces, backed by air strikes, fought intense gun battles with Hamas in and around the Nuseirat refugee camp, freeing the captives.

Noa Argamani, 26, Almog Meir Jan, 22, Andrei Kozlov, 27, and Shlomi Ziv, 41, who were abducted from the Nova music festival on 7 October have been returned to Israel.

The Israeli military has estimated that fewer than 100 people died in the operation.

But the latest figures from Gaza would, if confirmed, make it one of the deadliest days of the conflict so far.

People living in the densely populated area have described the terror of coming under intense bombardment and heavy gunfire.

One man, Abdel Salam Darwish told the BBC he was in a market buying vegetables when he heard fighter jets from above and the sound of gunfire.

"Afterwards, people's bodies were in pieces, scattered in the streets, and blood stained the walls," he said.

The return of the hostages to their families has sparked celebration in Israel and world leaders including US President Joe Biden have welcomed the news of their release.

But there has been mounting criticism of the deadly cost of the operation inside Gaza, with European Union foreign affairs chief Josep Borrell saying he condemned it "in the strongest terms".

"Reports from Gaza of another massacre of civilians are appalling," he wrote on X.

An Israeli minister said that instead of condemning Hamas for hiding behind civilians, the EU had condemned Israel for saving its citizens.

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Images from the Nuseirat refugee camp area show intense bombardment and people mourning the dead.

Two hospitals in Gaza, al-Aqsa hospital and al-Awda hospital said they had counted 70 bodies between them.

The Hamas-run health ministry released names of 86 people out of the 274 Palestinians it says were killed during the two-hour operation.

Previously, Israel's military spokesman Daniel Hagari estimated there were fewer than 100 casualties in what was a "high-risk, complex mission" based on "precise intelligence".

Defence Minister Yoav Gallant said special forces operated "under heavy fire" when rescuing the hostages. One special forces officer was wounded and later died in hospital.

Videos from Gaza taken in the aftermath of the raid show scenes of carnage.

Footage from the al-Aqsa hospital shows numerous people with severe injuries laying on the ground, leaving barely any space on the blood-stained floor for doctors to move between patients.

Other video shows a frequent stream of new cases being driven in by car and ambulance and carried into the building.

The director of the Al-Awda Hospital in Nuseirat told BBC Arabic the number of dead coming to the hospital increased throughout Saturday.

Dr Marwan Abu Nasser spoke also about the lack of a morgue in the hospital to accommodate the bodies of those killed who had been taken to the hospital.

One man, who said more than 40 members of his family have been killed since the conflict began in October, described to the BBC being in a house which was hit by a strike.

"As soon as these children and women entered the house, the bombing attack took place, claiming the lives of all those inside it," he said,

"This home, which used to house approximately 30 people who then became 50, was bombed... only me, my father, my wife, and a young man survived...we are the only survivors out of 50 people.

The bloodshed on the ground prompted a rare venting of criticism at Hamas from people in Gaza.

Hassan Omar, 37, said he lamented the unnecessary loss of lives in Israeli strikes, telling the BBC: "For each Israeli hostage they could have freed 80 Palestinian prisoners and without any bloodshed - [that] is a million times better than losing 100 dead.

"My message to Hamas is stopping the loss is part of the gain, we should get rid of those who control us from Qatar hotels.”

The rescue of hostages came amid efforts for a ceasefire and hostage release deal between Israel and Hamas.

Israeli Prime Minister Benjamin Netanyahu has been urged to reach an agreement but faces opposition from far-right allies who say military action is the only way to bring the hostages back.

Saturday’s operation is the most successful rescue of hostages by the Israeli military in this war – and analysts say it could change the calculation of a prime minister who is under increasing pressure.

In response to the military offensive in Nuseirat, Hamas political leader Ismail Haniyeh said Israel could not force its choices on the group.

He said the group would not agree to a ceasefire deal unless it achieved security for Palestinians.

During its 7 October attacks in southern Israel Hamas killed about 1,200 people and took some 251 people.

Some 116 remain in the Palestinian territory, including 41 the army says are dead.

A deal agreed in November saw Hamas release 105 hostages in return for a week-long ceasefire and some 240 Palestinian prisoners in Israeli jails.

On Saturday, the Hamas-run health ministry said the death toll in Gaza is now 37,084 people.

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