The IDF said: "Tonight, the female soldier Pvt Uri Magidish was rescued, during a ground operation, after she was kidnapped by the terrorist organization Hamas on 7/10.

"The soldier was medically examined, her condition is good and she met with her family.

"The IDF and Shin Bet will continue to make every effort to bring about the release of the abductees."

It remains unknown exactly how the young soldier was rescued and whether any fighting was involved.

Follow live: Netanyahu condemns hostage video

Prime Minister Benjamin Netanyahu said the hostage was greeted with "open arms" after the successful action.

Speaking during a press conference, he said that ground action in Gaza creates the "possibility" of getting hostages out of the territory.

"Hamas will simply not do it without pressure, and this creates pressure. We are committed to getting all the hostages back home, and we think this method stands a chance," he told reporters.

The rescue was called a "big success" by Sky News' security and defence editor Deborah Haynes.

"Israel is known for never leaving its people," she said, but the scale of this operation makes it extremely difficult to ensure the return of all of their hostages.

"They have a long history of hostage rescue operations, but surely the challenge facing the troops in Gaza now has to be the most complex of all."

'Cruel psychological propaganda'

Earlier on Monday, a video released by Hamas claimed to show three female hostages sitting side by side against a bare wall.

One of the women, speaking in Hebrew, appears to criticise Mr Netanyahu and asks to be taken home in an exchange for Palestinian prisoners.

It remains unknown who the women are, and if they were speaking freely or not.

The video was labelled "cruel psychological propaganda" by Mr Netanyahu on X (formerly Twitter), who added that Israel is doing "everything to bring all the kidnapped and missing people home".

The country continues to demand the release of 239 hostages, which includes 33 children, according to Mr Netanyahu.

Israeli forces have been stationed on both sides of Gaza City and its surrounding areas to the north and are "prepared for any scenario", Rear Admiral Daniel Hagari, Israel's chief military spokesperson, said on Monday.

Some also claimed to hear tanks roll in, which Hamas said had pulled back towards the border, while other Gazans said a road by the coast in the west had been hit from the air and sea.

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The development has effectively "cut Gaza in two", Palestinian sources in the territory told Nicole Johnston, Sky journalist and former Gaza-based correspondent.

Gaza journalist Samy Zyara said civilians are no longer able to travel from north Gaza to the south on the main Salah al Din road, with Israeli tanks and bulldozers placed at Netzarim - a road junction on Gaza's main north-south highway.

Meanwhile, Islamic Jihad, a militant group fighting alongside Hamas, said in a statement that now is not the time for a truce, adding "our duty today is fight and fight".