A special force of the Israeli military rescued two Israeli hostages who were held in the Gaza city of Rafah, IDF officials said early Monday local time.

The big picture: The rescue operation took place as the Israeli military conducted heavy strikes in Rafah, killing at least 67 Palestinians, according to the Ministry of Health in Hamas-run Gaza said.

• The rescue was the second time since the Oct. 7 Hamas attack that the Israel Defense Forces conducted a successful rescue operation to free hostages. At least one other such operation failed two months ago.
• An IDF spokesperson said on Monday the two rescued hostages — identified as Fernando Merman, 60, and Luis Har, 70 — were evacuated in a helicopter to a hospital inside Israel and both are in good medical condition. Merman and Har were kidnapped from the Nir Itshak kibbutz on Oct. 7.

Driving the news: Monday's operation took place around 1 am local time, the IDF said.

• Forces from the Shin Bet special operations unit, the Israeli police counterterrorism unit and IDF navy seals arrived at a building in the heart of Rafah where the two hostages were held by Hamas, according to the IDF.
• The IDF spokesperson said in a briefing with reporters the forces managed to covertly reach the building and go to the second floor, blow up the door of the apartment with an explosive and kill the three militants who were holding the two hostages. 

Behind the scenes: The IDF and Shin Bet had been working on the operation for several weeks based on intelligence, a senior IDF official told Axios. The operational opportunity came overnight Sunday into Monday.

• The Israeli Air Force conducted heavy strikes in Rafah as a diversion to allow the extraction of the two hostages, the official said.
• A source with direct knowledge told Axios Israel notified the Biden administration of the operation after it was successfully concluded.

State of play: About 130 of the more than 240 hostages who were abducted on Oct. 7 remain in Gaza. More than 100, including Har's wife who is also Merman's sister and Merman's other sister and niece, were freed as part of a hostage deal in November. In late October, the IDF rescued a soldier who was being held in northern Gaza.

• Qatar and Egypt have been trying to mediate a new hostage deal, but major gaps between Israel and Hamas remain.
• Qatari, Egyptian, Israeli and U.S. officials are expected to hold a critical meeting in Cairo on Tuesday on the hostage talks.
• President Biden urged Israeli Prime Minister Benjamin Netanyahu on Sunday to try to find ways to close the gaps. A U.S. official said the administration has also made clear to Egypt that Hamas must face pressure in order to get a deal.

Zoom in: Monday's rescue operation came amid rising global concerns that the Israeli military could expand its ground operation into Rafah, where more than 1.2 million Palestinians are sheltering.

• Biden on Sunday also warned Netanyahu against expanding the ground operation without a plan for evacuating Palestinian civilians.

Go deeper: Israel rejects Hamas' hostage deal demands, but says still ready to negotiate

Editor's note: This article has been updated with new details throughout.