The bodies were returned after militants late on Thursday handed over the body of one of the last four remaining Israeli hostages taken during the October 7, 2023, attack that launched the war in the Gaza Strip.
Israel identified the returned body as that of Meny Godard, who was abducted from Kibbutz Be'eri in southern Israel.
His wife Ayelet was killed during the attack.
The armed wings of Hamas and the Palestinian Islamic Jihad said Godard's body was recovered in the south of the Gaza Strip.
The remains of 25 hostages have been returned to Israel since the ceasefire between Israel and Hamas began on October 10.
There are still three more in the enclave that need to be recovered and handed over.
Hamas returned 20 living hostages to Israel on October 13.
For each hostage returned, Israel has released the remains of 15 Palestinians, an exchange central to the ceasefire's first phase.
Overall, the number of bodies of Palestinians received so far is 330, of which only 95 have been formally identified, according to Gazan health ministry officials.
Also on Friday, the bodies of 27 unidentified Palestinians were interred in Deir al-Balah.
The Gazan health ministry said 182 Palestinians whose identity was not ascertained have already been buried.
Health officials in the enclave have said identifying the remains handed over by Israel is complicated by a lack of DNA testing kits.
The exchanges have gone ahead even as Israel and Hamas have accused each other of violating other terms of the deal.
Israel has accused Hamas of handing over partial remains in some instances and staging the discovery of bodies in others while Hamas has accused Israel of opening fire at civilians and restricting the flow of humanitarian aid into the territory.
The United Nations human rights chief Volker Türk on Friday joined a chorus of condemnation over a recent string of attacks by Israeli settlers against Palestinians in the West Bank, urging an end to the violence and for Israel to hold the perpetrators accountable.
US Secretary of State Marco Rubio said on Wednesday that there is concern that the events in the West Bank "could undermine what we're doing in Gaza."
Israeli officials have sought to cast settler violence as the work of a few extremists but Palestinians and rights groups say that the violence is widespread and carried out by settlers across the territory, with impunity from Israel's government, led by Israeli Prime Minister Benjamin Netanyahu, who has not commented on the surge in violence.
Meanwhile, the Palestinian Health Ministry in the West Bank said six teenagers - aged 15 to 17 - were shot and killed by Israeli fire in four separate incidents over the last two weeks.
In the most recent incident Thursday, two 15 year-old boys where killed near the village of Beit Ummar.
The Israeli military said in three of the four incidents, its soldiers were responding to "terrorists" hurling either Molotov cocktails or explosives, or were in the process of carrying out a "terror attack".
In one incident, the military said troops acting according to "standard operating procedures" opened fire against Palestinians throwing rocks to "remove the threat".
The next parts of the 20-point plan call for creating an international stabilisation force, forming a technocratic Palestinian government and disarming Hamas.
The agreement aims to wind down the war that was triggered by the Hamas-led attack on southern Israel that killed about 1200 people and resulted in 251 being taken hostage.
Israel responded with a military offensive that has killed more than 69,100 Palestinians in the Gaza Strip, according to the Gazan health ministry.
