A ceasefire in Gaza between Israel and Hamas is due to come into effect with a hostage release to follow hours later, opening the way to a possible end to a 15-month war that has upended the Middle East.
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Israeli forces started withdrawing from areas in Gaza's Rafah to the Philadelphi corridor along the border between Egypt and Gaza, pro-Hamas media reported early on Sunday.
The ceasefire agreement followed months of on-off negotiations brokered by Egypt, Qatar and the United States, and came just ahead of the January 20 inauguration of US President-elect Donald Trump.
The three-stage ceasefire will come into effect at 0630 GMT (5:30pm AEDT) on Sunday.
It's hoped the withdrawal of Israeli troops will lead to an end to the bloody 15-month war. (AP PHOTO)
Its first stage will last six weeks, during which 33 of the remaining 98 hostages - women, children, men over 50, the ill and wounded - will be released in return for almost 2000 Palestinian prisoners and detainees.
They include 737 male, female and teenaged prisoners, some of whom are members of militant groups convicted of attacks that killed dozens of Israelis, as well as hundreds of Palestinians from Gaza in detention since the start of the war.
Three female hostages are expected to be released on Sunday afternoon through the Red Cross, in return for 30 prisoners each.
After Sunday's hostage release, lead US negotiator Brett McGurk said, the accord calls for four more female hostages to be freed after seven days, followed by the release of three further hostages every seven days thereafter.
Israeli hostages in Gaza will be released in return for almost 2000 Palestinian prisoners. (AP PHOTO)
During the first phase the Israeli army will pull back from some of its positions in Gaza and Palestinians displaced from areas in northern Gaza will be allowed to return.
US President Joe Biden's team worked closely with Trump's Middle East envoy Steve Witkoff to push the deal over the line.
As his inauguration approached, Trump had repeated his demand that a deal be done swiftly, warning repeatedly that there would be "hell to pay" if the hostages were not released.
But what will come next in Gaza remains unclear in the absence of a comprehensive agreement on the postwar future of the enclave, which will require billions of dollars and years of work to rebuild.
And although the stated aim of the ceasefire is to end the war entirely, it could easily unravel.
Hamas, which has controlled Gaza for almost two decades, has survived despite losing its top leadership and thousands of fighters.
The war in Gaza has killed nearly 47,000 Palestinians, according to Gaza's health ministry. (AP PHOTO)
Israel has vowed it will not allow Hamas to return to power and has cleared large stretches of ground inside Gaza, in a step widely seen as a move towards creating a buffer zone that will allow its troops to act freely against threats in the enclave.
In Israel, the return of the hostages may ease some of the public anger against Prime Minister Benjamin Netanyahu and his right-wing government over the October 7, 2023 security failure that led to the deadliest single day in the country's history.
But hardliners in his government have already threatened to quit if war on Hamas is not resumed, leaving him pressed between Washington's desire to see the war end, and his far-right political allies at home.
And if war resumes, dozens of hostages could be left behind in Gaza.
Outside Gaza, the war sent shockwaves across the region, triggering a war with the Tehran-backed Lebanese Hezbollah movement and bringing Israel into direct conflict with its arch-foe Iran for the first time.
More than a year later, the Middle East has been transformed. Iran, which spent billions building up a network of militant groups around Israel, has seen its "Axis of Resistance" wrecked and was unable to inflict more than minimal damage on Israel in two major missile attacks.
Hezbollah, whose huge missile arsenal was once seen as the biggest threat to Israel, has been humbled, with its top leadership killed and most of its missiles and military infrastructure destroyed.
In the aftermath, the decades-long Assad regime in Syria was overturned, removing another major Iranian ally and leaving Israel's military effectively unchallenged in the region.
But on the diplomatic front, Israel has faced outrage and isolation over the death and devastation in Gaza.
Netanyahu faces an International Criminal Court arrest warrant on war crimes allegations and separate accusations of genocide at the International Court of Justice.
Israel has reacted with fury to both cases, rejecting the charges as politically motivated and accusing South Africa, which brought the original ICJ case as well as the countries that have joined it, of anti-Semitism.
The war was triggered by Hamas' October 7, 2023, attack on southern Israel in which 1200 people were killed and more than 250 taken hostage, according to Israeli tallies. More than 400 Israeli soldiers have been killed in combat in Gaza since.
Israel's 15-month campaign in Gaza has killed nearly 47,000 Palestinians, according to Gaza health ministry figures, which do not distinguish between fighters and civilians, and left the narrow coastal enclave a wasteland of rubble.
Health officials say most of the dead are civilians. Israel says more than a third are fighters.
Australian Associated Press