Israel's military spokesman, Rear Admiral Daniel Hagari, announced on Sunday that Hamas is holding hostages in Rafah, a city in southern Gaza.
The Israeli government has previously stated that Hamas is holding hostages in Gaza.
Netanyahu has pledged to launch a ground invasion in Rafah despite international criticism.
The number and identities of the hostages are not specified in the text.
The Israeli army is calling two reserve brigades for operational activities on the Gaza front.
It's unclear if the brigades will be deployed inside Gaza.
This announcement comes after the army recently withdrew most of its troops from Khan Yunis, leaving only one brigade to operate in the Palestinian territory.