In Gaza's Nuseirat Refugee Camp 5, Abdullah Joudeh came face-to-face with an Israeli special forces team, and lived.

"I found them just in front of me," Mr Joudeh told 7.30.

"Some were in the truck, some were on a ladder, some were on the balcony holding an iron pad — just like you see in the American movies — and breaking the doors."

Footage released by the Israeli military shows the team shooting its way into an apartment building – where they found three Israelis abducted from the Nova music festival on October 7 — 22-year-old Almog Meir Jan, 27-year-old Andrei Kozlov and 41-year-old Shlomi Ziv.

Another Israeli, 26-year-old Noa Argamani, was rescued from a nearby building.

Mr Joudeh says he had no idea any hostages were being held in the area.

Gazan health authorities say 274 people were killed during the rescue, while Israel says the death toll is more like 100. 

Neither side has said how many of the dead were civilians, although there is no dispute that at the time of the rare daylight raid the streets were crowded with people shopping at a nearby market.

"The shooting did not stop for about three quarters of an hour, not even for a second," Mr Joudeh, who moved to the camp one month ago after being displaced three times during the war, told 7.30

"Then after around 45 minutes [the] shooting stopped, so we thought that they withdrew, and thought we needed to go down to see if we can go out to the street. 

"We were afraid that they will wipe out the neighbourhood above us, since we overheard that they were freeing captives. 

"We decided to go out to the main street, since it will be safer."

Soon afterwards, Mr Joudeh says, his building was hit by an air strike and destroyed.

He says those left inside were killed.

"There were so many martyrs in the street and people were running as if it was the Judgement Day," he said.

"Absolutely horrifying."

Families of hostages still waiting

Juxtaposed against the grief in Gaza, Israel's national mood has been lifted by the return of four hostages, who spent eight months in captivity.

"I was very happy. These people are like my family," Meirav Leshem Gonen told 7.30.

"I know Almog's mother, Almog's uncle, Andrei's mother, the wife of Shlomi, Noa's father and aunt and everything. I know them."

She knows the families so well because of the camaraderie that's been forged since her own daughter, Romi, was kidnapped on October 7.

"But it was a mixed feeling, because I was jealous. I wanted that it would also be my daughter. Not instead of any of them, but I want my daughter to go out also. I envy them."

She says it's impossible to know the consequences of this raid.

"I think that everything is speculation, because we don't really know what this kind of operation will really do to the hostage negotiations," she told 7.30.

"It can help the negotiations, since Hamas will see that we are not sitting and waiting, we are working on getting them out, and we intend to do that by any means, and if not [by] an agreement then we will do it with force.

'Pain of death'

Middle East analyst and journalist Laura Blumenfeld, from Johns Hopkins University, says the raid has helped remind the world that there are 116 Israelis still unaccounted-for in Gaza.

"We kind of forgot about what it felt like to have people released since November, we haven't had any movement," Blumenfeld said.

"The second thing is it gave Israel a little bit of wind at their back, which is what they need, I think, to make those concessions. 

"It helps them save face if they do have to cede ground."

US Secretary of State Anthony Blinken is in Israel this week to try and forge a ceasefire deal that will lead to the release of the surviving hostages.

It's his eighth trip since the start of the conflict, but Blumenfeld says the two leaders who must sign off on a deal. Israel's Benjamin Netanyahu and Hamas's Yahya Sinwar are both unwilling to compromise.

"Both of them are speaking in absolutist terms," she said.

"For Sinwar, it is a permanent ceasefire and for Netanyahu it's total victory. 

"The problem here is that negotiations are typically a pain/gain trade-off, but here the pain for these two leaders is pain of death.