The war in Gaza has ended and the Middle East is going to "normalise," US President Donald Trump said on Sunday as he flew to Israel, which was waiting for Hamas to release Israeli hostages as world leaders were gathering to discuss the next steps toward peace.

"The war is over, you understand that," Trump told reporters aboard Air Force One as he began a flight from Washington to Israel.

Asked about prospects for the region, Trump said, "I think it's going to normalise."

A ceasefire between Israel and Hamas held in Gaza for a third day on Sunday ahead of the expected release of Israeli hostages and Palestinian prisoners and a scheduled address by Trump to Israel's parliament.

Thousands of Palestinians continued to travel north towards Gaza City, the focus of Israeli attacks over the past two months, hopeful the ceasefire would bring an end to the war.

“Tomorrow is the beginning of a new path. A path of building, a path of healing, and I hope – a path of uniting hearts,” Israeli Prime Minister Benjamin Netanyahu said in a televised statement.

Such optimism was shared broadly.

"There is a lot of joy among the people," said Abdou Abu Seada, a resident of Gaza who added that the joy was tempered by exhaustion after two years of war that has destroyed much of Gaza.

Government spokesperson Shosh Bedrosian said Israel expected hostages to start being released early Monday morning with the 20 living hostages to be released together.

In the event that hostages were released earlier, Israel was ready to receive them, she said. Their release is to be followed later by the handover of bodies of the remaining 28 deceased hostages.

Under the ceasefire agreement, Hamas is due by noon local time on Monday to release the remaining hostages. They were taken captive on October 7, 2023 when the group's militants launched the surprise attack on Israel that ignited the war.

Trump is due to arrive in Israel on Monday to address the Knesset, the parliament, before travelling to Sharm El Sheikh in Egypt for a world leaders' summit on ending the Gaza war.

Palestinian Authority President Mahmoud Abbas will also attend the summit, an Axios reporter said on Sunday, citing a senior Palestinian official.

The US, along with Egypt, Qatar and Turkey, mediated what has been described as a first phase agreement between Israel and Hamas for a ceasefire and the release of hostages by Hamas and prisoners and detainees by Israel.

The Israel Prison Service said it had transferred some Palestinian prisoners to other facilities ahead of their expected release. The Israeli Ministry of Justice has released the names of 250 Palestinians, convicted of murder and other serious crimes, who are to be freed under the deal.

The list does not include senior Hamas commanders that the Islamist militant group had sought to free, or prominent figures from other factions such as Marwan Al Barghouti or Ahmed Saadat.

Although that was not expected to derail the agreement, Hamas' prisoners information office said talks were ongoing with Israeli mediators over the list of prisoners to be freed.

Israel is also to release 1,700 Palestinians who have been detained in Gaza since October 7, 2023, and 22 Palestinian minors, along with the bodies of 360 militants.

Israeli government spokesperson Bedrosian said the prisoners would be released once the living hostages reach Israeli territory.

Israeli Defense Minister Israel Katz said that once the hostages were returned, the military would destroy underground tunnels in Gaza built by Hamas.

Palestinians returning to northern Gaza have described widespread devastation. Rescue workers warned there could be unexploded ordnance and bombs in the area.

Amjad Al Shawa, who heads a Palestinian organisation coordinating with aid groups, estimated 300,000 tents were needed to temporarily house 1.5 million displaced Gazans. (Reuters)