An AFP photographer saw Gazans moving the bodies in blue plastic shrouds from a truck towards the newly dug mass grave east of Rafah.
Health ministry employees wearing white protective clothing lowered them into the ground, near the tents of people displaced by the Israel-Hamas war.
A Palestinian source at the Rafah border crossing with Egypt told AFP the bodies returned had been "stolen by the occupation (Israeli) army during its incursion" into Gaza.
A second source at Gaza's ministry of religious affairs told AFP that Israel "stole them from Bani Suheila cemetery, east of Khan Yunis" around two weeks ago.
The Israeli military did not respond to a request to comment, although it has previously made remarks about exhuming bodies from Gaza graves in search of Israeli hostages.
"The hostage identification process, conducted at a secure and alternative location, ensures optimal professional conditions and respect for the deceased," the military said Monday.
The government media office in Hamas-run Gaza accused Israel of removing organs from the bodies, an allegation the military did not respond to when contacted by AFP.
In November and December, AFP journalists also witnessed the reburial of bodies which Gaza officials said had been exhumed by Israeli forces.
Israel's relentless military offensive has killed at least 26,751 people in Gaza, most of them women and children, according to the territory's Hamas-run health ministry.
The war was triggered by Hamas's unprecedented October 7 attack that resulted in about 1,140 deaths in Israel, mostly civilians, according to an AFP tally of official figures.
Militants also seized 250 hostages, of whom Israel says around 132 remain in Gaza, including the bodies of at least 28 dead captives.
