Hamas handed over the remains of a deceased Israeli hostage on Monday as the Palestinian group came under increasing pressure to return its remaining deceased captives as promised under the Gaza ceasefire.

Israeli Prime Minister Benjamin Netanyahu's office said Israeli forces had received a coffin containing what Hamas said was the sixteenth of 28 bodies of hostages taken in the October 7, 2023 attacks.

The Israeli military and security service were to take the coffin from Gaza to Israel, where it will be received in a military ceremony before being brought to the national forensic institute for identification and eventual return to the hostage's family.

"All of the hostages' families have been updated accordingly, and our hearts are with them in this difficult hour. The effort to return our hostages is ongoing and will not cease until the last hostage is returned," the prime minister’s office said in a statement.

The latest exchange came as both senior Israeli officials and an association representing the families of the October 7 hostages demanded that Hamas speed up the transfer, which has slowed since it released its 20 living captives.

"Hamas knows exactly where every one of the deceased hostages is held. Two weeks have passed since the deadline set in the agreement for the return of all 48 hostages, yet 13 remain in Hamas captivity," the Hostages and Missing Families Forum said.

"The families urge the government of Israel, the United States administration and the mediators not to advance to the next phase of the agreement until Hamas fulfils all of its obligations and returns every hostage to Israel," the association said.

Hamas spokesperson Hazem Qassem protested that the claim that the group knows the location of the remaining missing bodies is "false," arguing that Israel's bombardment during the two-year conflict had left locations unrecognisable.

"We affirm our commitment to completing the first phase of the ceasefire agreement to prevent the occupation from finding any pretexts," he said, referring to Palestinians' fears that Israel could renew military action despite the truce

"We are determined to hand over the bodies of the Israeli captives as soon as possible," he said.

During their October 7, 2023 attack on Israel, Hamas militants took 251 people hostage, most of whom had been released, rescued or recovered before this month's ceasefire.

Hamas says it is committed to the ceasefire and insists it is trying to return all the remaining bodies -- 11 Israelis and two workers from Thailand and Tanzania -- but that the search has been hampered by the destruction wrought on Gaza during the war.

In the past two days, Egypt has sent recovery crews and heavy earth-moving equipment into Gaza, with Israeli approval, to help with the recovery operation. (AFP)