US President Donald Trump announced that Israel and Hamas have agreed to a first phase of a peace plan for Gaza.

All hostages will be released soon. Israel will withdraw its troops to the areas we agreed to," he said in a post on social media.

While Hamas has said it has reached an agreement, a BBC source in Palestine has said Israel has not yet received a list of the Palestinians it will release.

Israeli Prime Minister Benjamin Netanyahu described the agreement as "a great day for Israel".

The ceasefire will come into effect immediately after the agreement is ratified by their respective governments.

The peace plan negotiated in Egypt has raised hopes of ending the two-year war.

Israel's offensive in Gaza, following Hamas's attacks, has reportedly killed at least 67,183 people, including 20,179 children.

Palestinians in Kahan Younis, in southern Gaza, took to the streets to express their joy after news of the first round of the peace plan was announced.

Israeli hostage families also issued a statement saying, "Thank you Trump; this is a historic achievement."

Israel will release Palestinian prisoners in return for Hamas' release of the hostages.

"Gaza will be safe. The rich countries of the region will join forces to rebuild Gaza. I have no doubt that peace will prevail in the Middle East," Trump added.