US President Donald Trump hailed a "tremendous day for the Middle East" as he and regional leaders signed a declaration meant to cement a ceasefire in Gaza, hours after Israel and Hamas exchanged hostages and prisoners.

Trump made a lightning visit to Israel, where he lauded Prime Minister Benjamin Netanyahu in an address to parliament, before flying to Egypt for a Gaza summit where he and the leaders of Egypt, Qatar and Turkey signed the declaration on Monday as guarantors to the Gaza deal.

"This is a tremendous day for the world, it's a tremendous day for the Middle East," Trump said as more than two dozen world leaders sat down to talk in the resort of Sharm el-Sheikh.

He later declared that the assembled leaders had "achieved what everybody said was impossible".

"At long last, we have peace in the Middle East," Trump said in a speech.

According to the document, the signatories pledged to "pursue a comprehensive vision of peace, security and shared prosperity in the region", and also welcomed "the progress achieved in establishing comprehensive and durable peace arrangements in the Gaza Strip".

Egyptian President Abdel Fattah al-Sisi said the Gaza deal "closes a painful chapter in human history" and sets the stage for a two-state solution.

As part of Trump's plan to end the Gaza war, Hamas on Monday freed the last 20 surviving hostages it held after two years of captivity in Gaza.

In exchange, Israel released 1,968 mostly Palestinian prisoners held in its jails, its prison service said.

The Israeli hostages freed on Monday were the last still alive in captivity from 251 seized in the Hamas-led attacks of October 7, 2023 that killed 1,200 people and triggered the war.

The ceasefire and partial Israeli withdrawal agreed last week halted one of Israel's biggest offensives of the war, an all-out assault on Gaza City that was killing scores of people per day.

Since then, huge numbers of Palestinians have been able to return to the ruins of homes in the Gaza Strip, swathes of which were reduced to a wasteland by Israeli bombardment that killed 68,000 people.

Formidable obstacles remain, even to securing an enduring ceasefire, much less to bringing a wider, more durable peace. Among the immediate issues still to be resolved: recovering the remains of another 26 Israeli hostages believed to have died and two whose fates are unknown.

Hamas says recovering the bodies could take time as not all burial sites are known. It said on Monday it would hand over four bodies. Israel's military confirmed it had received the first two, and an official said two more were handed over later.

Aid supplies must be rushed into the enclave, where hundreds of thousands of people face famine. UN aid chief Tom Fletcher underlined the need to "get shelter and fuel to people who desperately need it and to massively scale up the food and medicine and other supplies going in."

Beyond that, crucial issues have yet to be resolved, including how to govern and police Gaza, and the ultimate future of Hamas, which still rejects Israel's demands to disarm.

Hamas gunmen, seeking to assert their presence, launched a security crackdown in Gaza City after Israel's pullback, killing 32 members of a rival group, a Palestinian security source said.

Trump, speaking on his flight to the region, said Hamas had been given a temporary green light for fighters to keep order: "They do want to stop the problems, and they've been open about it, and we gave them approval for a period of time."

The Gaza War has also reshaped the Middle East through spillover conflicts, with Israel imposing punishing damage in a 12-day war against Iran and campaigns against Tehran's regional allies, including Lebanon's Hezbollah and Yemen's Houthis.

Trump, who has presented his plan to end the war in Gaza as the catalyst for a wider regional peace settlement, even floated the idea of a peace deal between arch Middle East enemies Iran and Israel, telling the Knesset he thought Iran wanted one: "Wouldn't it be nice?" (Agencies)