In a breakthrough after two years of devastating conflict, Israel said Thursday that a ceasefire and hostage release deal for Gaza has been signed by all parties under a plan brokered in Egypt.

Israel said Thursday all parties have signed the first phase of a Gaza ceasefire and hostage release deal, adding that Hamas freeing the captives would "bring the end to this war".

The agreement in Egypt follows a 20-point peace plan for Gaza announced last month by US President Donald Trump, after more than two years of war sparked by Hamas's October 2023 attack on Israel.

Trump said he planned to leave on Sunday for the Middle East. Egypt is planning an event to celebrate the conclusion of the agreement, with the US president also expected to stop in Israel and consider going to Gaza.

Despite celebrations in Israel and Gaza and a flood of messages from world leaders hailing the deal, numerous issues remain unsettled, including the plan's call for Hamas to disarm and a proposed transitional authority for Gaza led by Trump himself.

Senior Hamas official Osama Hamdan said the Palestinian Islamist movement rejected the latter.

"No Palestinian would accept this. All the factions, including the Palestinian Authority, reject this," Hamdan told Qatar-based broadcaster Al Araby.

Trump said the issue of Hamas surrendering its weapons would be addressed in the second phase of the peace plan.

"There will be disarming," he told reporters, adding there would also be "pullbacks" by Israeli forces.

Israeli Prime Minister Benjamin Netanyahu meanwhile faced pushback from far-right allies.

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The war in Gaza has triggered a humanitarian crisis / © AFP

Israel's far-right National Security Minister Itamar Ben Gvir said he would vote against the deal, calling the plan to release thousands of Palestinian prisoners in exchange for the 47 hostages remaining in Gaza "an unbearable heavy price".

The ceasefire was to take hold in devastated Gaza within 24 hours of the security cabinet meeting, the Israeli government said.

Following that meeting, Israel's full cabinet met to approve the deal, under which the military should withdraw from Gaza.

"The final draft of phase one was signed this morning in Egypt by all parties to release all the hostages," government spokeswoman Shosh Bedrosian told journalists earlier.

"All of our hostages, the living and the deceased, will be released 72 hours later, which will bring us to Monday," she said.

Israeli Foreign Minister Gideon Saar said the release of the hostages "should bring the end to this war".

- 'Tears of joy' -

US envoy Steve Witkoff and Trump's son-in-law Jared Kushner travelled to Jerusalem Thursday night, where they met with Israeli President Isaac Herzog, his office said.

The two later met with Prime Minister Benjamin Netanyahu, his office said, with Israeli media reporting that they later participated in the ongoing government meeting held to approve the plan.

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A man walks through a memorial to victims of the October 7 attacks in southern Israel a day before the anniversary / © AFP

The deal, thrashed out in indirect, closed-door talks in the Red Sea resort town of Sharm El-Sheikh, also envisions a surge of aid into Gaza, where the UN has declared famine.

The announcement sparked joy in Gaza, much of which has been flattened by Israel's offensive.

"Honestly, when I heard the news, I couldn't hold back. Tears of joy flowed. Two years of bombing, terror, destruction, loss, humiliation, and the constant feeling that we could die at any moment," displaced Palestinian Samer Joudeh told AFP.

In Israel, thousands of people gathered in a Tel Aviv square to celebrate, some holding photos of hostages still in Gaza and waving Israeli and US flags.

"We have been waiting for this day for 734 days. We cannot imagine being anywhere else this morning," said Laurence Ytzhak, 54.

While Arab leaders including Palestinian president Mahmud Abbas said they hoped the ceasefire would lead to a permanent solution to the Israel-Palestinian conflict, there was no indication the talks were addressing any of the deeper issues at stake.

Hamas has submitted a list of Palestinian prisoners it wants released from Israeli jails in the first phase.

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The fighting in Gaza has upended the lives of countless families, displacing most residents and forcing children out of school / © AFP

The list names 250 Palestinians sentenced to life imprisonment and 1,700 others arrested by Israel since the war began, according to a Hamas source.

High-profile inmate Marwan Barghouti -- from Hamas's rival, the Fatah movement -- is among those the group wanted to see released, according to Egyptian state-linked media.

However, Israel said Barghouti would not be part of the exchange.

- 'Convince Israelis to deescalate' -

The talks were taking place under the shadow of the second anniversary of the October 7, 2023 Hamas attack, which 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, where 47 remain, including 25 the Israeli military says are dead.

Israel's retaliatory campaign in Gaza has killed at least 67,194 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 more than half of the dead are women and children.

Gaza's civil defence agency, a rescue force operating under Hamas's authority, reported several strikes on the territory after the announcement of the deal.

AFP journalists and witnesses said more explosions and artillery fire could be heard Thursday evening in southern and central Gaza.

Egyptian President Abdel Fattah al-Sisi said mediators must "endeavour to convince the Israelis to deescalate or cease fire until the agreement we reached is signed".

Countries around the world welcomed the deal, with UN Secretary General Antonio Guterres saying: "The fighting must stop once and for all."

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