Palestinians burst into streets to celebrate and began returning to the rubble of bombed-out homes on Sunday after a ceasefire deal halted fighting in Gaza, while three female hostages freed by Hamas were reunited with their mothers inside Israel.

Hamas fighters drove through the southern city of Khan Younis with crowds cheering and chanting. In the north of the territory, bombed into oblivion in the war's most intense fighting, people picked their way on narrow roads through a devastated landscape of rubble and twisted metal.

"I feel like at last I found some water to drink after being lost in the desert for 15 months," said Aya, a displaced woman from Gaza City who has been sheltering in Deir Al-Balah in the central Gaza Strip for over a year.

In Tel Aviv, hundreds of Israelis in a square outside the defence headquarters watched a live broadcast from Gaza showing the hostage release on a giant screen.

The crowd cheered, embraced and wept as three female hostages could be seen getting into a Red Cross vehicle surrounded by armed Hamas fighters.

Soon after, the Israeli military said Romi Gonen, Doron Steinbrecher and Emily Damari had been reunited with their mothers at a meeting point inside Israel, close to the kibbutz and nearby music festival where they had been abducted in the October 7, 2023 Hamas raid.

The three appeared in good health in a video later released by the military. Damari, who lost two fingers when she was shot the day she was abducted, could be seen smiling and embracing her mother as she held up a bandaged hand.

"I would like you to tell them: Romi, Doron and Emily – an entire nation embraces you. Welcome home," Prime Minister Benjamin Netanyahu told a commander by phone as the hostages were driven across the border.

In the Israeli-occupied West Bank, buses awaited the release of Palestinian prisoners from Israeli detention. Hamas said the first group to be freed in exchange for the hostages includes 69 women and 21 teenage boys.

The first phase of the truce in the 15-month-old war between Israel and Hamas took effect following a three-hour delay during which Israeli warplanes and artillery pounded the Gaza Strip.

That last-minute Israeli blitz killed 13 people, according to Palestinian health authorities. Israel blamed Hamas for being late to deliver the names of hostages it would free, and said it had struck terrorists. Hamas said the holdup in providing the list was technical.

"Today the guns in Gaza have gone silent," US President Joe Biden said on his last full day in office, welcoming a truce that had eluded US diplomacy for more than a year.

"It was a long road," Biden said. "But we've reached this point today because of the pressure Israel built on Hamas, backed by the United States."

The truce calls for fighting to stop, aid to be sent in to Gaza and 33 of nearly 100 Israeli and foreign hostages to go free over the six-week first phase in return for nearly 2,000 Palestinian prisoners held in Israeli jails. (Reuters)