AMNA NAWAZ: Israel said today it had recovered the body of a hostage kidnapped and killed during Hamas' October 7 attacks, along with the remains of another hostage it didn't identify.

The announcement was yet another reminder of how the country even today lives in the shadow of October 7.

Nick Schifrin and producer Karl Bostic in Israel set out to measure the country's mood 693 days since the war began.

(CHANTING) NICK SCHIFRIN: In Tel Aviv, at the end of this hot summer of discontent, the heat boils with an angry message: Save them now.

Israelis call this Hostage Square, a barometer of the country's hope and despair.

And, on stage, Liran Berman issues a challenge.

LIRAN BERMAN, Brother of Hamas Hostages: Bring them home!

End the war!

The hostages are the most important thing, and we need to prioritize their return.

NICK SCHIFRIN: Berman is the big brother to twins Gali and Ziv, both kidnapped from Kibbutz Kfar Aza during the October 7 terrorist attacks.

LIRAN BERMAN: All of us have the same hobbies.

All of us love football, or soccer.

All of us love music.

We have very tight bond.

NICK SCHIFRIN: But, today, nearly 700 days after they were taken, Berman fears his brother's lives hang by a thread.

LIRAN BERMAN: We know that they were separated in the first day, and we know that they are surviving.

And I'm terrified as a brother of two live hostages that this current deal will fall again.

NICK SCHIFRIN: The current deal, Hamas says it's willing to release half of the 20 hostages believed to be still alive and the remaining ones after 10 weeks in exchange for an Israeli withdrawal.

But now Israel is demanding all the hostages released at once and Hamas' total defeat.

LIRAN BERMAN: I trust my government.

I'm just worried that it's taking too long.

I hope the Israeli government is listening to me, and I will never stop being optimistic.

For the sake of my brothers, I can't be pessimistic.

I can't allow myself to be pessimistic, so there is always hope.

Even in the darkest hours, there is always hope.

NICK SCHIFRIN: But there is a darkness here.

It plays out in soldiers' funerals, a continuous national mourning and a trauma that is still collective.

EFRAT MACHIKAWA, Niece of Hamas Hostages: We are still not waking up from this nightmare, and so many people are getting hurt.

Our families are broken.

Our hostages are fading.

We, the families of the kidnapped.

NICK SCHIFRIN: Efrat Machikawa is an international activist who promotes peace.

But since October the 7th, she says her ideals are burdened by pain and loss.

EFRAT MACHIKAWA: What I felt on October 7 is that I got into some kind of a moral hell.

All the values, all the morals we all grew up on and what I taught and lectured about all my life were suddenly taken away from me.

NICK SCHIFRIN: On October the 7th in Kibbutz Nir Oz, Hamas kidnapped six members of her family, including her aunt Margalit.

Five have now returned home, including her dear uncle Gadi, who spent 482 days in captivity.

But Gadi's partner, Machikawa's aunt, was killed accidentally on October the 7th by an Israeli helicopter targeting Hamas.

EFRAT MACHIKAWA: Pain has no border.

And losing in a war has no border as well.

We're all losing.

And we're all hurt by now.

Our cities, our nation was attacked by vicious evilness of Hamas terrorists, and it wasn't a war we chose to get into.

But now, almost two years into this war, I have doubts.

NICK SCHIFRIN: Doubts about how Israel is waging the war in Gaza and its plan to displace one million people from Gaza City.

EFRAT MACHIKAWA: Who are we to tell them where to go?

Why would someone think of such an idea?

It's their home.

NICK SCHIFRIN: And doubts about Prime Minister Benjamin Netanyahu and his right-wing coalition.

EFRAT MACHIKAWA: Our prime minister is lost.

He lost his way.

We Israelis are not our extreme government and we are not people of revenge and awful behavior that I am ashamed of.

NICK SCHIFRIN: These days, Israel is a country that ricochets between anger over failure to bring home all the hostages; 80 percent of Israelis want the war to end.

And there's anxiety watching every major event in Gaza and every military decision.

Israel is calling up 60,000 Reserves to take over Gaza City, with the stated goal of eradicating Hamas and bringing all the hostages home.

For the soldiers themselves, who stopped by this rest stop near the Gaza border, they preserve their purpose.

These soldiers ask to speak to us anonymously.

WOMAN: We don't want war, OK?

All we want is peace, and we're not looking for fighting.

NICK SCHIFRIN: Dror Trabelsi is the canteen's co-owner with his two brothers.

He takes pride in his food and service and his home region's ability to fight the country's enemies.

DROR TRABELSI, Owner, Shuva Brothers Canteen: I'm from the south.

I'm the one who actually suffered for the last 30 years from Hamas, not knowing until we did.

It's not an endless war.

It's a war that needs to be end.

NICK SCHIFRIN: Israeli society is no stranger to debate, but this one has been raw and widespread.

No one here is untouched by a war whose weight falls heavy on families, families of hostages and families of soldiers.

They call themselves Mothers on the Frontline, tens of thousands of Israeli women whose sons and daughters are fighting in Gaza.

AGAMIT GELB, Mothers on the Frontline: You feel that you send your son to the army when you don't trust your leadership.

NICK SCHIFRIN: Agamit Gelb is one of the group's leaders.

She has two sons.

One was just called up for duty last week.

Her brother has been called up for a sixth time.

AGAMIT GELB: The whole family is going under a real change when you send a soldier to the army.

It's not a normal life.

You're always waiting for them to get home.

You always worry.

NICK SCHIFRIN: This is Israel's longest war.

Gelb and others yearn for it to end, yearn to feel more safe.

AGAMIT GELB: I don't want to be afraid to live here.

I don't want to be alerted all day, all night.

I don't want to send my sons to a never-ending story war.

This is not the way we want to live here.

NICK SCHIFRIN: But, for now, that is life here, because, despite the demands, despite the urgency, the war goes on.

For the "PBS News Hour," I'm Nick Schifrin.