Hadar Goldin went missing in action during fighting in the Gaza Strip two days ago.
"A special committee, led by the IDF (army) chief rabbi, announced the death of the IDF infantry officer of the Givati Brigade, Lieutenant Hadar Goldin, who was killed in battle in the Gaza Strip on Friday," the army said in a statement.
An army spokesman refused to confirm or deny that the soldier's remains had been found.
The soldier's family has been notified and will receive support, the statement added.
The Israeli side had previously suggested that 23-year-old Goldin had been captured by Hamas fighters in Gaza.
Hamas's armed wing, the Ezzedine al-Qassam Brigades, had acknowledged its militants staged an ambush early Friday in which soldiers were killed, but denied holding Goldin.
"We have lost contact with the mujahedeen unit that was in that ambush, and we think that all the fighters in this unit were killed by Zionist shelling along with the soldier, who the enemy says is missing," it said on Saturday.
Lieutenant Hadar Goldin (AAP)
Israel considers the capture of its soldiers a casus belli. It launched a 34-day war on Lebanon's Hezbollah in 2006 after it seized two soldiers.
Late Saturday, Israeli media had watched as Israeli Defence Minister Moshe Yaalon and the army Chief Rabbi Rafi Peretz visited the home of Goldin's parents.
Hundreds of people, including the parents of three young Israelis kidnapped and killed in the Palestinian West Bank in June, also assembled at the Goldin family home in central Kfar Saba.
Goldin's mother on Saturday urged Israel army not to pull its troops out of the Gaza Strip, where the conflict has raged for almost four weeks, until her son was brought back.
The latest death brings the Israeli army death toll to 64 since the start of hostilities on July 8, the heaviest since the 2006 war against the Lebanese Hezbollah.
More than 1,700 Palestinians, mostly civilians, have been killed.
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