Efrat Katz and most of the militants in the vehicle were killed when the Israeli aircraft fired on them on October 7, the army investigation said.

The helicopter "fired at a vehicle that had terrorists in it, and which, in retrospect, based on the testimonies, also had hostages in it," the army said in a statement.

"As a result of the fire, most of the terrorists manning the vehicle were killed, and most likely, Efrat Katz ... was killed as well."

The "tragic and unfortunate" event occurred at a time of "fighting and conditions of uncertainty," Israeli Air Force chief Tomer Bar said in the statement.

"The commander of the air force did not find fault in the operation by the helicopter crew, who operated in compliance with the orders in a complex reality of war."

The army statement said the mistake occurred because surveillance systems could not distinguish hostages from kidnappers once in a vehicle, and that "the shooting was defined as shooting at a vehicle with terrorists".

Katz, 68 at the time of Hamas's unprecedented attack on southern Israel, was kidnapped from the Nir Oz kibbutz close to the Gaza border.

Her daughter Doron Katz-Asher and her two children were taken hostage during the attack, but were later released on November 24.

Katz's partner Gadi Moses and his ex-wife Margalit Moses were also taken hostage during the attack. She was later released but Gadi is believed to remain in captivity in Gaza and still alive.

The Hamas attack resulted in the death of 1,170 Israelis and foreigners, most of them civilians, according to an AFP tally of Israeli official figures.

Palestinian militants took more than 250 hostages, of whom 130 remain in Gaza, including 34 the Israeli army says are dead.

Israel responded to the Hamas attack with a relentless offensive in Gaza that has killed at least 33,091 people, mostly women and children, according to the health ministry in the Hamas-run territory.