Israel has formally identified the remains of children Ariel and Kfir Bibas, but says a third body handed over by Hamas alongside them is not that of their mother.
Hamas released the bodies of four hostages in Gaza on Thursday, local time, saying they were the remains of Shiri Bibas, her two sons, and a fourth man, Oded Lifshitz.
The bodies were taken to Israel's national forensics institute for formal identification.
The Israel Defense Forces (IDF) said forensic testing has shown Shiri Bibas was not among the group.
The body that was thought to be Shiri Bibas has not been identified, and doesn't match any of the other hostages.
"This is a violation of utmost severity by the Hamas terrorist organisation, which is obligated under the agreement to return four deceased hostages," the IDF said in a statement.
"We demand that Hamas return Shiri home along with all our hostages.
"We extend our heartfelt condolences to the Bibas family during this incredibly difficult time and remain committed to doing everything possible to ensure Shiri and all the hostages are brought home at the earliest opportunity."
There was no immediate reaction from Hamas, according to Reuters.
The IDF added that it believes both children were murdered by Hamas in captivity in November 2023.
It said Ariel was four years old when he died, and Kfir was ten months old.
Hamas said the trio were killed as Israel launched its bombardment of Gaza in November 2023.
The children and both of their parents were taken from their home in Kibbutz Nir Oz, near the Gaza border, during the October 7 terrorist attack.
Yarden Bibas, the childrens' father, was released by Hamas on February 1, as part of the first phase of the ceasefire deal.
"[He] went out to protect them and was abducted prior to the abduction of Shiri and the children," the IDF said on Friday.
The family of the other hostage whose body was released, Oded Lifshitz, has confirmed he has been formally identified.
The Israeli government said he was "murdered in captivity" by the Palestiniann Islamic jihad group.
"503 agonising days of uncertainty have come to an end. We had hoped and prayed so much for a different outcome," the family said in a statement.
"Now we can mourn the husband, father, grandfather, and great-grandfather who has been missing from us since October 7."
Anguished crowd gathers in Tel Aviv
During past handovers, large crowds have massed at Tel Aviv's Hostage Square to watch broadcasts of events on video screens.
On Thursday morning, it was much more sombre, with some of those who gathered crying and praying.
As photos of Israeli hostages were displayed, the square was filled with hundreds of Israeli flags adorned with the yellow ribbon symbol of the hostage movement.
United Nations Human Rights chief Volker Turk slammed Hamas for its parade and the way it handed over the bodies, and has accused Hamas of disrespecting the remains of the Israelis and their families.
"Under international law, any handover of the remains of deceased must comply with the prohibition of cruel, inhuman or degrading treatment, ensuring respect for the dignity of the deceased and their families," he said.
Israel's government has also condemned the handover ceremony.
More hostages to be released over weekend
On Saturday, local time, six more hostages are due to be returned by Hamas, with Israel set to release hundreds more Palestinians — likely women and minors detained by Israeli forces in Gaza.
After that, talks on the second phase of the ceasefire, which were meant to begin on February 4, are expected to start.
"It will happen this week," Israeli Foreign Minister Gideon Sa'ar told a press conference in Jerusalem.
That will include the return of all remaining 62 hostages, a full withdrawal of Israeli forces from Gaza and a permanent ceasefire.
Under the third and final phase of the ceasefire, the bodies of remaining hostages are due to be returned.
The start of a major reconstruction of Gaza, supervised by Egypt, Qatar and the United Nations, is also meant to begin.
Hamas-led militants took 251 hostages during their cross-border attack in southern Israel on October 7, 2023, which killed about 1,200 people, according to Israeli authorities.
Israel's retaliatory assault on Gaza has killed more than 48,000 Palestinians, according to Palestinian health officials, laid waste to much of the enclave, and displaced 90 per cent of the population.