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Using a three-dimensional finite-difference time-domain method, we present an extensive study of the losses in two-dimensional (2D) photonic crystals patterned in step-index waveguides. We examine the origin of these losses and their dependence on the various system parameters such as the filling ratio, the lattice constant, the shape of the holes, and the propagation direction. Furthermore, we examine the possibility of studying these losses using an approximate 2D model; the validity and limitations of such a model are discussed in detail.