Israeli hostages may be released as early as Saturday under a U.S. plan to end the war in Gaza and the country's military will complete the first part of a partial withdrawal from the enclave within 24 hours of the deal being signed, said a source briefed on details of the agreement.

According to Reuters, the signing of the agreement is expected to take place at noon Israel time (0900 GMT) on Thursday, said the source.

Israel's security cabinet and government are due to hold meetings on the agreement at 5 p.m. Israel time (1400 GMT).

Israelis and Palestinians rejoiced after Trump announced that a ceasefire and hostage deal was reached under the first phase of his plan to end a war in Gaza that has killed more than 67,000 people and reshaped the Middle East.

However, Israeli strikes on three Gaza City suburbs continued overnight and in the morning hours of Thursday, residents said. Lines of smoke rose over Shejaia, Tuffah and Zeitoun in the early hours of Thursday, witnesses said, but there were no reports of casualties.

Just a day after the second anniversary of Hamas militants' cross-border attack that triggered Israel's devastating assault on Gaza, indirect talks in Egypt yielded an agreement on the initial stage of Trump’s 20-point framework to bring peace to the Palestinian enclave.

The accord, if fully implemented, would bring the two sides closer than any previous effort to halt a war that had evolved into a regional conflict, drawing in countries such as Iran, Yemen and Lebanon.

But the agreement announced by Trump late on Wednesday was short on detail and left many unresolved questions that could yet lead to its collapse, as has happened with previous peace efforts.

"I am very proud to announce that Israel and Hamas have both signed off on the first Phase of our Peace Plan," Trump said on Truth Social.

"This means that ALL of the Hostages will be released very soon, and Israel will withdraw their Troops to an agreed upon line as the first steps toward a Strong, Durable, and Everlasting Peace," Trump added.

Successful completion of the deal would mark a significant foreign policy achievement for the Republican president, who had campaigned on bringing peace to major world conflicts but has struggled to swiftly deliver, both in Gaza and on Russia's invasion of Ukraine.

"With the approval of the first phase of the plan, ALL our hostages will be brought home," Israeli Prime Minister Benjamin Netanyahu said in a statement. "This is a diplomatic success and a national and moral victory for the State of Israel."

The conflict upended the Middle East in Israel's favor after it assassinated the leaders of Tehran-backed Hamas and Lebanon's Hezbollah and killed top Iranian commanders and pounded Yemen's Houthis.

But global outrage has mounted against Israel's assault. Multiple rights experts, scholars and a U.N. inquiry say it amounts to genocide. Israel calls its actions self-defense after the 2023 Hamas attack.

Hamas confirmed it had reached an agreement to end the war, saying the deal includes an Israeli withdrawal from the enclave and a hostage-prisoner exchange.

"We affirm that the sacrifices of our people will not be in vain, and that we will remain true to our pledge - never abandoning our people’s national rights until freedom, independence, and self-determination are achieved," Hamas said.

Gaza authorities say more than 67,000 people have been killed and much of the enclave has been flattened since Israel began its military response to the Hamas cross-border attack on October 7, 2023.

Around 1,200 people were killed and 251 were taken hostage back to Gaza, according to Israeli officials, with 20 of the 48 hostages still held believed to be alive.

Despite the hopes raised for ending the war, crucial details are yet to be spelled out, including the timing, a post-war administration for the Gaza Strip and the fate of Hamas.

A Hamas source said the living hostages would be handed over within 72 hours of the Israeli government approving the deal. Hamas officials have insisted it will take longer to recover the bodies of dead hostages, believed to number about 28, from Gaza’s rubble.

Trump told Fox News' 'Hannity' program on Wednesday that the hostages will probably be released on Monday.

Netanyahu and Trump spoke by phone and congratulated each other on an "historic achievement," and the Israeli prime minister invited the U.S. president to address Israel’s parliament, according to Netanyahu's office.

Hamas said earlier on Wednesday it had handed over its lists of the hostages it held and the Palestinian prisoners held by Israel that it wanted to be exchanged.

The Islamist group has so far refused to discuss Israel's demand that it give up arms, which the Palestinian source said Hamas would reject as long as Israeli troops occupy Palestinian land.

Oil prices fell as the prospects of a ceasefire lessened one potential disruption to world supplies.

The next phase of Trump's plan calls for an international body led by Trump and including former British Prime Minister Tony Blair to play a role in Gaza's post-war administration.

Arab countries which back the plan say it must lead to eventual independence for a Palestinian state, which Netanyahu says will never happen.