Crowds of Gazans chanted and embraced on Wednesday as news spread that a ceasefire and hostage release deal had been reached between Israel and Hamas aimed at ending more than 15 months of war in the Palestinian territory.

After a US official and a source close to the negotiations first revealed the agreement, Israel cautioned that several points "remain unresolved" that it hoped would be addressed.

But celebrations were already underway in Gaza, where journalists saw crowds of people hugging and taking photos to mark the announcement.

"I can't believe that this nightmare of more than a year is finally coming to an end. We have lost so many people, we've lost everything," said Randa Sameeh, a 45-year-old who was displaced from Gaza City to the Nuseirat Camp in the centre of the territory.

"We need a lot of rest. As soon as the truce begins, I will go to the cemetery to visit my brother and family members. We buried them in Deir el-Balah cemetery without proper graves. We will build them new graves and write their names on them."

Outside Deir al-Balah's Al-Aqsa Martyrs Hospital, where so many of the war's casualties have been taken, hundreds of Palestinians gathered to chant, sing and wave flags, AFPTV footage showed.

At one point, a member of the crowd and a journalist in body armour were raised on people's shoulders to conduct an interview above the mass of elated Palestinians.

Meanwhile, The "final details" of the Gaza ceasefire and hostage release deal are still being worked on, the office of Israeli Prime Minister Benjamin Netanyahu said in the early hours of Thursday.

Israeli Prime Minister Benjamin Netanyahu spoke to US President Joe Biden and President-elect Donald Trump on Wednesday to thank them for helping to secure a deal for the release of hostages held in Gaza, his office said.

Gaza's civil defence agency said at least 20 people were killed in Israeli strikes after a ceasefire deal between Israel and Hamas was announced on Wednesday. (AFP)