The pro-Palestinian activist was found hanged in house north of Gaza City, the ruling Hamas government's press office said in a statement.

"The government media office denounces the criminal kidnapping and murder of an Italian solidarity activist... who was found by security hanging in an abandoned house in northern Gaza," it said.

Hamas said two suspected kidnappers were arrested and security officials were looking for accomplices.

The pro-Palestinian International Solidarity Movement (ISM) named the activist as 36-year-old member Vittorio Arrigoni, who had been living in the Gaza Strip for much of the past three years, since first entering in 2008.

In a video posted on YouTube, the kidnappers said Arrigoni had been taken hostage in order to secure the release of an unspecified number of their members detained by Hamas security forces, including a jihadi leader called Sheikh Hisham al-Suedani.

In Rome, the Italian foreign ministry denounced "in the strongest manner the act of vile and senseless violence committed by extremists who are indifferent to the value of human life," a statement said.

AFP