Israeli special forces have freed four hostages held in Nuseirat, central Gaza, as Israeli attacks and airstrikes in the same area killed at least 93 Palestinians, including children, local medics said.

The rescue raid was the largest of the war, bringing three men and a woman who were kidnapped at the Nova music festival back to Israel.

They were named as Noa Argamani, 25, Almog Meir Jan, 21, Andrey Kozlov, 27, and Shlomi Ziv, 40.

While Israelis celebrated the return of the hostages on Saturday night, Palestinians in Gaza mourned dozens of dead, or watched over loved ones in the overcrowded al-Aqsa martyrs’ hospital, the only one in the area that is still partly functioning.

The bodies of nearly 100 Palestinians were brought to the hospital along with more than 100 injured, spokesperson Khalil Degran told the Associated Press. The agency’s reporters also counted dozens of bodies, including that of a baby.

Palestinians including children, injured during Israeli attack on al-Bureij Refugee Camp, are brought to Al-Aqsa martyrs’ hospital Photograph: Anadolu/Getty Images

Degran later told the Associated Press that overall, 210 dead had been taken to al-Aqsa martyrs’ hospital and to al-Awda hospital, saying he had spoken to the director there. Al-Awda’s numbers couldn’t immediately be confirmed.

The Palestinian president, Mahmoud Abbas, described the Israeli attacks as a “bloody massacre” and called for an emergency UN security council session.

The EU’s top diplomat, Josep Borrell, condemned “in the strongest terms … reports from Gaza of another massacre of civilians”.

In a post on X, he called for a ceasefire and the release of all remaining hostages. “The bloodbath must end immediately,” he said.

Map of Gaza and south-western Israel

The Israeli military spokesperson R Adm Daniel Hagari confirmed that dozens of Palestinians had been killed. He knew that “under 100” casualties had been reported, but could not say how many were civilians, he told a briefing.

Special forces operated under heavy fire in a “complex urban environment” to carry out the rescue, the Israeli defence minister, Yoav Gallant, said, describing it as one of the most extraordinary operations he had seen in a decades-long military career.

Troops deployed for the raid included air force and special forces, with naval support. One team extracting the hostages was confronted by militants, and when a rescue vehicle got stuck, called in backup, escaping under heavy bombardment, Channel 12 television reported.

The Israeli prime minister, Benjamin Netanyahu, said the raid – only the third successful military rescue of the war – was a historic achievement and proof “Israel does not surrender to terrorism”. One officer from the counter-terrorism police unit was killed in the raid.

Netanyahu has long insisted that military pressure is the best way to ensure the return of all Israelis captured on 7 October.

But as the war drags on into its ninth month, he has come under increasing international pressure to agree a ceasefire deal and domestic pressure to secure the return of all Israelis still held in Gaza.

Seven hostages have now been freed by Israeli forces, but the majority of those who are now back home were handed over under a temporary ceasefire deal last November. There are still 120 Israelis in Gaza, a third of them presumed dead.

Israelis celebrate after four hostages taken from Nova festival rescued in Gaza – video report

Hostages’ families welcomed the return of the four freed on Saturday but said the military could not bring back all of those still held captive, and instead called on the government to reach a ceasefire deal to free their loved ones.

“The hostages don’t have time. We can’t free everyone in operations, and we must go for a deal that will save lives,” said Ayala Metzger, the daughter-in-law of hostage Yoram Metzger, 80, who this week was announced to have died in captivity.

A spokesperson for Izz ad-Din al-Qassam, Hamas’s armed brigades, Abu Ubaida, claimed some Israeli hostages had been killed during the rescue raid, without giving evidence or details.

All four of the freed hostages were healthy and were reunited with their families after medical tests in an Israeli hospital.

Palestinian militants kidnapped 250 people on 7 October, taking the captives to Gaza.

Argamani had become one of the most well-known of the Israelis kidnapped that day, after video that captured her shouting “don’t kill me” as she was abducted by two men on a motorbike was widely shared after the attack.

Her mother, Liora Argamani, who has stage four cancer, had said her greatest wish was to see her daughter again, and the two were reunited Saturday evening in a Tel Aviv hospital.

Noa Argamani is reunited with her father. Photograph: Screengrab

It was Argamani’s father’s birthday on Saturday and he met her soon after she landed back on Israeli soil. He described her release as a “gift”, in a statement that also called on Israelis to join the rally for the release of other hostages.

Argamani also spoke on the phone to Netanyahu, telling him it was good to hear Hebrew spoken again, and to the president, Isaac Herzog.

US intelligence was reportedly involved in supporting the Israeli mission, and President Joe Biden welcomed the return of the four hostages.

He has been pushing hard for a deal to halt the war and secure the return of everyone held in Gaza and said that effort would continue.

“We won’t stop working until all the hostages come home and a ceasefire is reached,” he said at a joint press conference with his French counterpart, Emmanuel Macron.

He has apparently been frustrated by resistance in the Israeli government to negotiating a halt to fighting, suggesting in a recent interview that Netanyahu may be prolonging the war to protect his personal political interests.

People wave Israeli flags and celebrate the hostages’ rescue outside Tel-HaShomer hospital in Tel Aviv. Photograph: Abir Sultan/EPA

The Israeli leader has repeatedly said the war will not end until Hamas is “destroyed” and all hostages are home. Hamas says it will not accept a temporary halt in fighting.

Saturday’s rescue operation may give Netanyahu a temporary relief from domestic pressure to reach a hostage release deal.

After the news broke, his political rival Benny Gantz, a security cabinet member, delayed a speech planned for Saturday evening. He had been widely expected to announce he was leaving the government, having given Netanyahu an ultimatum to form a long-term plan for Gaza.

Gantz will now consult allies on whether the hostage release raid represents a fundamental change in the course of the war, and if he should reconsider his decision to quit, Haaretz reported.

Netanyahu called on Gantz to stay in the government, in a post on X on Saturday evening, saying: “This is a time for unity.”

Gantz posted an ambivalent reply, saying the prime minister and his team must “look responsibly at how best we might continue from here”.

Additional reporting by Matan Cohen and the Associated Press.