HAMAS militants handed over four captive female Israeli soldiers to the Red Cross in Gaza City on Saturday.
Israel was set to release 200 Palestinian prisoners later in the day as part of the fragile ceasefire in the Gaza Strip.
Crowds had earlier begun to gather in Tel Aviv and Gaza City on Saturday ahead of the expected swap between Israel and Hamas.
The truce is aimed at winding down the deadliest and most destructive conflict ever fought between Israel and the militant group.
When the ceasefire started on Sunday, three hostages held by Hamas were released in exchange for 90 Palestinian prisoners, all women and children.
On Saturday, four hostages are expected to be freed for 200 prisoners.
The four Israeli soldiers: Karina Ariev, 20; Daniella Gilboa, 20; Naama Levy, 20; and Liri Albag, 19, were captured in Hamas’ October 7 2023 attack that ignited the war.
In Gaza City’s central Palestine Square, a crowd began to gather early as militants worked to cordon off an area where the hostages were expected to be handed over to the Red Cross.
After the swap, Israel is expected to begin pulling back from the Netzarim corridor – an east-west road dividing Gaza in two – and allowing displaced Palestinians in the south to return to their former homes in the north for the first time since the beginning of the war.
Palestinians will only be allowed to move north on foot, with vehicular traffic restricted until later in the ceasefire.
Israel’s air and ground offensive, one of the deadliest and most destructive in decades, has killed more than 47,000 Palestinians, according to local health officials, who do not say how many were militants.
They say women and children make up more than half the fatalities.