JERUSALEM, May 7 (Reuters) - Israel will continue its operation in the southern Gaza city of Rafah until Hamas forces in the area are destroyed or the Islamist movement hands over one of the Israeli hostages it still holds, Defence Minister Yoav Gallant said on Tuesday.

"This operation will continue until we eliminate Hamas in the Rafah area and the entire Gaza Strip, or until the first hostage returns," he said in a statement. (Reporting by James Mackenzie)