Hundreds of thousands of Palestinians returned to a devastated Gaza City on Saturday, as Hamas warned the next stage in US President Donald Trump's peace plan would be more difficult than the first.

Trump's Middle East envoy promised Israeli hostage families their loved ones would be returned to them by Monday, and Steve Witkoff visited Gaza one day after the guns fell silent.

Israel and Hamas are now expected to release hostages and prisoners, two years after the Palestinian militant group's October 7, 2023 attack triggered a counter-offensive that killed more than 67,000 Palestinians.

After the prisoner exchange and a partial Israeli withdrawal, the conflict's US-led mediators will then have to secure a longer-term political solution that will see Hamas hand in its weapons and step aside from governing Gaza.

Hossam Badran from Hamas's political bureau, warned: "The second phase of the Trump plan, as it is clear from the points themselves, contains many complexities and difficulties."

Hamas, he said, would not attend the formal signing of the Gaza peace deal in Egypt, where international leaders are due to gather on Monday to discuss implementing the first phase of the ceasefire.

Hamas is resisting calls to disarm. An official from the group, speaking on condition of anonymity, told AFP that it was "out of the question".

Badran said that, while the group does not want war, "our Palestinian people and the resistance force will undoubtedly confront and use all their capabilities to repel this aggression if this battle is imposed."

Under the Trump plan, as Israel conducts a phased withdrawal from Gaza's cities, it will be replaced by a multinational force from Egypt, Qatar, Turkey and the United Arab Emirates, coordinated by a US-led command centre in Israel. (AFP)