Nadav Popplewell, 51, who was born in Wakefield, West Yorks, and lived in Israel, was one of four men who died in Hamas captivity, the Israeli military said.
His body and those of Chaim Peri, 79, Amiram Cooper, 85, and Yoram Metzger, 80, were understood to remain under Hamas control in Gaza last night.
An Israeli military spokesman said "they were killed while together in the area of Khan Younis during our operation there against Hamas".
No further details were given.
Lord Cameron said he was "greatly saddened" to hear of Mr Popplewell's death. He said: "My thoughts are with his loved ones at this terrible time for them.
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