Israelis welcomed the rescue Monday of two Gaza hostages, while fears of a looming ground incursion grew among more than a million Palestinians trapped in the war-ravaged territory's densely crowded far south.
Israel's top ally the United States said it would "not support a full-scale military operation" without protections for civilians in Rafah city, where Israeli forces freed the captives in a dramatic overnight raid.
State Department spokesman Matthew Miller said a "credible" Israeli plan to keep civilians safe was needed. He added that a new truce in the four-month war "is possible".
The rare rescue mission under heavy air strikes killed around 100 people in Rafah, according to the Hamas-ruled Gaza Strip's health ministry.
Fernando Simon Marman, 60, and Luis Har, 70, had been held by militants since Hamas's October 7 attack that triggered the war.
They were freed amid an intense firefight and then airlifted to a hospital where a spokeswoman said "the signs of prolonged captivity... are evident".
Israeli Prime Minister Benjamin Netanyahu hailed "a perfect operation", while the Palestinian foreign ministry said the deaths of dozens of Gazans amounted to a "massacre".
With international mediators working towards a truce and a hostage-prisoner exchange, Netanyahu said that only "continued military pressure, until complete victory, will result in the release of all our hostages".
In Rafah, Palestinian residents stood among the large bomb craters and rubble left after the intense battle.
Ibrahim Abu Jaber said he saw a building collapse, killing the "40 to 50 people -- displaced people, children, elderly" inside.
"What if the actual invasion took place?" he said. "I think the martyrs would be in the thousands."
- 'Not done' -
The bloodiest ever Gaza war began when Hamas launched its unprecedented attack on October 7 that resulted in the deaths of about 1,160 people in Israel, mostly civilians, according to an AFP tally based on official figures.
Vowing to destroy Hamas in response, Israel has carried out a relentless bombardment and ground offensive in Gaza that the Hamas-ruled territory's health ministry says has killed at least 28,340 people, mostly women and children.
Militants also seized about 250 foreign and Israeli captives from southern Israel, around 130 of whom Israel says are still held in Gaza including 29 who are presumed dead.
"Luckily for us, as a family, they were saved tonight," said Har's son-in-law Idan Bejerano, praising the rescue of the two Argentinian-Israeli men.
"But I must say that the job is not done," Bejerano added, urging action to free the remaining hostages.
Israeli forces in Rafah blew open a locked door on the second floor of a building and "successfully rescued the abductees" after nearly 130 days in captivity, a spokesperson for Netanyahu's office said.
Troops then came under fire "and a prolonged battle took place, during which dozens of Hamas targets were attacked from the air in order to allow the force to leave the building", the spokesperson said.
Army spokesman Daniel Hagari said "many terrorists" had been killed.
Israeli Defence Minister Yoav Gallant said the rescue mission proved "we can reach every location", telling special forces "there will be more operations" soon.
Weeks of talks towards a ceasefire have brought no results yet, but a source close to the negotiations told AFP plans were underway for a new meeting in Cairo on Tuesday.
The Hostages and Missing Families Forum campaign group warned that "time is running out for the remaining hostages", urging the Israeli government to "exhaust every option on the table to release them".
Dozens of hostages were freed by Gaza militants, in exchange for Palestinian prisoners, during a one-week truce in November.
Miller said a new deal would have "tremendous" benefits for the release of further hostages but also "for the humanitarian effort in Gaza".
- 'Stop and think' -
Netanyahu has vowed to send ground troops into Rafah, where about 1.4 million displaced Palestinians are struggling to survive in shelters and tent camps.
Aid groups and foreign governments have voiced deep concern over the potentially disastrous consequences of expanding operations in Rafah, which they say would worsen an already dire humanitarian situation.
The UN's Food and Agriculture Organization reported "unprecedented levels" of "near famine-like conditions" in the besieged territory.
The International Criminal Court's chief prosecutor, Karim Khan, said he was "deeply concerned by the reported bombardment and potential ground incursion by Israeli forces".
In a statement published on X, formerly Twitter, he said his office's investigation into the Gaza war is "being taken forward as a matter of the utmost urgency".
British Foreign Secretary David Cameron urged Israel to "stop and think seriously before it takes any further action" in Gaza.
The United Nation's human rights chief, Volker Turk, warned that "an extremely high number of civilians" would likely be killed or injured in a full Israeli incursion into Rafah.
US President Joe Biden last week called Israel's actions in Gaza "over the top", which on Monday prompted European Union foreign policy chief Josep Borrell to say: "Maybe you should provide less arms in order to prevent so many people" being killed.
Washington provides Israel with billions of dollars in military aid.
A Dutch court on Monday ruled that the Netherlands must stop delivering US-owned F-35 parts to Israel due to "a clear risk" the fighter jets would be involved in international law violations.
Netanyahu has said Israel would provide "safe passage" to civilians trying to leave Rafah.
The EU's Borrell, like Gazans themselves, wondered where they can go.
"They are going to evacuate -- where? To the moon?" Borrell said.
Iman Dergham, displaced from Khan Yunis city to Rafah, said that "wherever we go there's bombing. Martyrs and wounded are everywhere."
Forty-two people were able to leave the danger behind. The French foreign ministry said it evacuated the group, including French nationals, through the Rafah crossing with Egypt.