Palestinian militants and Israel carried out a hostage-prisoner swap on Saturday under a Gaza ceasefire deal, but a last-minute dispute blocked the expected return of hundreds of thousands of Palestinians to devastated northern Gaza.

As part of the exchange, the second since the truce took effect last Sunday, four freed Israeli women hostages, all soldiers, arrived home in Israel after more than 15 months of captivity in Gaza.

In exchange, Israel's prison service confirmed that 200 prisoners, whom it called "terrorists", were freed.

The Israeli captives, Karina Ariev, Daniella Gilboa and Naama Levy, all aged 20, and Liri Albag, 19, waved, smiled, and gave thumbs up as they were paraded on a stage in Gaza City.

Masked and armed militants flanked them during a ceremony watched by hundreds of residents.

In Tel Aviv, where a crowd gathered to watch their release on a large TV screen at a plaza known as Hostage Square, there were tears of joy, applause and a loud cheer as Israeli flags waved.

After their handover to the Red Cross, Israel's military said the women were transferred back into Israel and "reunited with their parents".

Buses carrying the released Palestinians left Ofer prison in the occupied West Bank and Ktziot prison in the Negev desert.

As dozens of the former prisoners reached the West Bank city of Ramallah, crowds of Palestinians erupted in joy, raising many of them onto their shoulders.

Hamas’ political bureau had said on Friday that Palestinians displaced by the war to southern Gaza should have been able to begin returning to the north following Saturday's releases.

But Israel on Saturday said it would block such returns until civilian woman hostage Arbel Yehud is released.

Prime Minister Benjamin Netanyahu's office said she "was supposed to be released today" but a Hamas source has said Yehud will be "released as part of the third swap set for next Saturday". (AFP)
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Last updated: 2025-01-25 HKT 22:39