Yotam Haim, Samer Al-Talalka and Alon Shamriz have been named as those killed in Shejaiya, an eastern suburb of Gaza City.

News of their deaths on Friday (December 15) prompted a late-night protest outside Israel's defense headquarters in Tel Aviv.

Among the protesters was Zohar Avigdori, a relative of another hostage.

"My reaction, first of all, was grief. These are families that I know personally, and people who have been waiting so hopefully for their loved ones to return. And to me, it struck me in the heart, showing me that there has to be a deal right now to bring them back."

On Saturday, an Israeli official gave a phone briefing on an initial inquiry into the incident.

He said the three hostages were not wearing shirts and had a stick with a white cloth on it but that a soldier had felt threatened and declared that they were terrorists.

The official said two of the hostages were killed immediately when Israeli forces then opened fire.

The third was wounded, the official said, and retreated into a nearby building where he called for help in Hebrew.

According to the official, the battalion commander issued a ceasefire order but there was another burst of fire and the third hostage was killed.

"This was against our rules of engagement," the official added.

Hamas militants rampaged through Israeli towns on October 7 - killing 1,200 people according to Israel, and capturing 240 hostages.

Close to 19,000 people have been killed in Israel's subsequent bombardment of Gaza, according to Gaza health authorities.

More than 100 women, children, teens and foreigners held hostage were released in a deal struck in late November. Other hostages have been declared dead by Israeli authorities but many remain captive.

A funeral for one of the hostages, Samer Al-Talalka, took place on Saturday in Hura, in southern Israel.

Around 300 people turned up to bid farewell, including his cousin who told Israel's public broadcaster Kan that they had "so many hopes and expectations" that Al-Talalka would "come back to us".

"We are not going to start pointing fingers," Alaa Al-Talalka said, "it is not the time", adding: "This is the time to ask for the war to end."