US President Donald Trump voiced optimism that there was a "real chance" to end the war in Gaza, as Israel remembered victims of the October 7 attacks two years ago on Tuesday.

In his message marking the anniversary, Israeli Prime Minister Benjamin Netanyahu vowed to achieve all the goals of the war, including crushing the Palestinian militant group Hamas which waged the attacks.

"We are in fateful, decisive days. We will continue to act to achieve all the war's objectives: the return of all abductees, the elimination of Hamas's rule, and ensuring that Gaza will never again pose a threat to Israel," Netanyahu said in a statement.

Indirect negotiations between Israeli and Hamas negotiators are being held in the Egyptian resort town of Sharm El-Sheikh, based on a 20-point plan proposed by Trump to end the war.

"There's a real chance that we could do something," Trump told reporters in the Oval Office, adding that US negotiators were also involved in the talks.

"I think there's a possibility that we could have peace in the Middle East."

Trump said the United States would do "everything possible to make sure everyone adheres to the deal" if Hamas and Israel do agree on a ceasefire.

Hamas' top negotiator Khalil al-Hayya said that his group "wants guarantees from (US) President Trump and the sponsor countries that the war will end once and for all".

Two years ago to the day, at the close of the Jewish festival of Sukkot, Hamas-led militants launched the deadliest attack on Israel in the country's history, sparking a huge retaliatory offensive in Gaza.

It resulted in the deaths of 1,219 people, mostly civilians, according to an AFP tally based on official Israeli figures.

Militants also took 251 people hostage into Gaza, of whom 47 remain captive, including 25 the Israeli military says are dead.

Senior Hamas official Fawzi Barhoum called the October 7 attack a "historic response" to Israel's bid to "eradicate the Palestinian cause".

He also said Hamas was working to "surmount all obstacles" to sealing a deal in Egypt.

Global pressure to end the war has escalated, with much of Gaza flattened, a UN-declared famine unfolding and Israeli hostage families still longing for their loved ones' return.

A UN probe last month accused Israel of genocide in Gaza while rights groups have accused Hamas of committing war crimes and crimes against humanity during the October 7 attack. Each side rejects the allegations against it.

Trump's plan calls for a ceasefire, the release of all the hostages, Hamas's disarmament and a gradual Israeli withdrawal from Gaza.

The plan received positive responses from both Israel and Hamas and prompted the indirect talks that started in Egypt on Monday.

In Israel, relatives and friends of those killed at the Nova music festival lit candles and held a minute's silence at the site of the attack, where militants killed more than 370 people and seized dozens of hostages.

Orit Baron, whose daughter Yuval was killed there with her fiance Moshe Shuva, told AFP that October 7 was a "black" day for her family.

"Now it's two years. And I'm here to be with her, because this is the last time that she was alive," the 57-year-old mother said at the site of the attack, adding she felt "that right now she's with me here".

Late on Tuesday, thousands of Israelis held a memorial in Tel Aviv, with all speakers focussing on the hostages still held in Gaza.

Israel's military campaign in Gaza has killed at least 67,160 people, according to the health ministry in the Hamas-run territory, figures the United Nations considers credible.

The data does not distinguish between civilians and combatants but indicates that over half of the dead are women and children.

Israeli strikes continued on Tuesday, killing at least six people, according to Gaza's civil defence agency – a rescue force operating under Hamas's authority. (AFP)