Israeli Prime Minister Benjamin Netanyahu told American broadcaster CBS Evening News that they had "strong indications" hostages were held at al-Shifa hospital.
"We had strong indications that they were held in the Shifa Hospital, which is one of the reasons we entered the hospital," he said.
"If they were [there], they were taken out," he added.
Israeli military raided the hospital, which is Gaza's largest, for a second day Thursday. Israel says Hamas militants maintain a command node at the hospital.
That claim has been denied by hospital staff and Hamas militants, considered a terror organization by the US, EU and others.
Humanitarian aid to Gaza suspended Friday because of telecom outage
Critical humanitarian aid to the Gaza Strip through the Rafah border crossing will not take place on Friday because of a collapse in telecom services, the UN agency for Palestinian refugees (UNRWA) said.
A lack of fuel to the besieged strip shut down all internet and phone networks on Thursday, the main Palestinian telecom provider said.
"We have seen fuel and food and water and humanitarian assistance being used as a weapon of war," Juliette Touma, the UNRWA communications director, told reporters in Amman, Jordan.
Touma said UNRWA can't operate because it has no fuel, and "It is simply outrageous that humanitarian agencies are reduced to begging for fuel."
Israel did provide UNRWA with limited fuel this week for the delivery of food, she said. No other infrastructure, like hospitals or water treatment plants, was allowed to use the fuel.
The first truck carrying fuel entered Gaza a day ago, and UNRWA said it was the "equivalent of half a truck! Not at all enough."
More than 11,400 Palestinians — two-thirds of them women and minors — have been killed since the war began, according to the Palestinian Health Ministry in the West Bank, which has taken over tallying deaths in Gaza as the Hamas-led ministry in the enclave stopped publishing the information due to lack of fuel and connectivity.
Neither of the Palestinian health ministries differentiate between civilian and militant deaths. Hamas is designated a terror organization by Israel, the EU, Germany, the US and others.
Blinken calls for 'urgent' de-escalation of settler violence in occupied West Bank
US Secretary of State Antony Blinken called on Israel urgently to take steps to de-escalate tensions in the occupied West Bank.
During a phone call with Benny Gantz, a member of Israel's decision-making War Cabinet, Blinken said there was an "urgent need for affirmative steps to de-escalate tensions in the West Bank, including by confronting rising levels of settler extremist violence," according to State Department spokesman Matthew Miller.
Blinken and Gantz "discussed efforts to augment and accelerate the transit of critical humanitarian assistance into Gaza," Miller said.
Blinken also spoke on the ongoing diplomacy to free hostages taken by Hamas militants during their attacks on southern Israel on October 7.
Hamas is designated a terror organization by the US, Israel and other countries as well as by the European Union.
This year was already the deadliest in at least 15 years for West Bank residents, with some 200 Palestinians and 26 Israelis killed, according to the United Nations.
But just in the three weeks since the October 7 deadly attack, more than 120 Palestinians in the West Bank have been killed. Clashes with soldiers have caused most deaths.