It named the possible victims as Fausto Piano and Salvatore Failla.
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Italy’s Foreign Ministry said the men might be two of the four employees of the Italian construction company Bonatti who were kidnapped last July near a compound owned by oil and gas group Eni.
He also confirmed that two other Italian hostages had been killed in recent clashes between IS militants and Sabratha’s local forces.
“According to our investigations the two Italians who were kidnapped in Libya past year were executed by Islamic State militants before the confrontation took place”, Sabri Kshada said.
Libyan forces conducted raids on Wednesday in the western city of Sabratha, killing seven suspected Daesh fighters in a militant hideout, Reuters reported.
That followed a USA air strike on the outskirts of Sabratha on February 19 in which more than 40 people were killed.
A Syrian militant and a female Tunisian terrorist with a three-year-old son were arrested during the gun battle while three more suspects managed to escape the scene, he added.
Taking advantage of the political chaos, Daesh took control of Libya’s northern port city of Sirte in June 2015, nearly four months after it announced its presence in the city, and made it the first city to be ruled by the militant group outside of Iraq and Syria.
Earlier, Kshada said that 46 members of local brigades had been killed in clashes with militants since last week. The area has seen fierce fighting between IS fighters and Sabratha’s local forces, a coalition of militia and forces loyal to the government in Tripoli.
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Mr Essid paid tribute to the army and national guard units who had eliminated the “terrorist cell sent in from Libya”, and said the killing of the militants had “foiled the terrorist operations the cell was planning”.
