Three Israeli hostages mistakenly killed by Israeli soldiers in Gaza were shot dead while holding a white cloth, an Israeli military official says.

The official said the case was "against our rules of engagement" and an investigation was happening at the "highest level".

The hostages - Yotam Haim, 28, Samer Talalka, 22, and Alon Shamriz, 26 - were killed in Shejaiya on Friday.

Israeli troops have been facing stiff resistance in the area near Gaza City.

The case will add pressure on Israeli authorities to reach a deal for the release of captives who remain in Gaza.