Four female Israeli soldiers were reunited with their families on Saturday after being released under the terms of a ceasefire deal agreed with Hamas.
Israel later released 200 Palestinian prisoners in the second exchange of a fragile ceasefire.
Karina Ariev, Daniela Gilboa, Naama Levy, and Liri Albag waved and smiled while flanked by Hamas militants before being escorted to ICRC vehicles, which transported them to Israeli forces.
Experts said the hostages likely acted under duress as they smiled, with Hamas attempting to show that it remained in control in Gaza.
Pictures later showed them being emotionally embraced by relatives in Israel.
Israel's Prison Service said it had released 200 Palestinians, including 121 people serving life sentences after being convicted of deadly attacks against Israelis, while others were held without charge.
But Saturday also saw the ceasefire deal’s first major crisis, after Israel said it would not allow displaced Palestinians to begin returning to northern Gaza as had been expected by Sunday, because a civilian hostage who was supposed to be released, Arbel Yehoud, had not been.
Israeli forces shot and killed a Palestinian man close to the Netzarim corridor, Palestinian medical officials said.
Israel's military said it fired warning shots in response to "gatherings of dozens of suspects” and said it was unaware of anyone being harmed.
Israeli Prime Minister Benjamin Netanyahu's office said Israel would not allow Palestinians to begin returning to northern Gaza until Mr Yehoud, a civilian taken from a kibbutz in Hamas' October 7, 2023, attack that ignited the war, was freed.
Hamas said it held Israel responsible for "any delay in implementing the agreement and its repercussions."
The US National Security Council continues to push for Yehoud's release.
Saturday's exchange was the second since a ceasefire began last Sunday and Hamas handed over three Israeli civilians in exchange for 90 Palestinian prisoners.
Among those released was British-Israeli Emily Damari who was seen to emotionally reunite with her mother.
The ceasefire agreement, worked out after months of on-off negotiations brokered by Qatar and Egypt and backed by the United States, has halted the fighting for the first time since a truce that lasted just a week in November 2023.
In the first six-week phase of the deal, Hamas has agreed to release 33 hostages, including children, women, older men and the sick and injured, in exchange for hundreds of Palestinian prisoners in Israeli jails, while Israeli troops pull back from some of their positions in the Gaza Strip.
In a subsequent phase, the two sides would negotiate the exchange of the remaining hostages, including men of military age, and the withdrawal of Israeli forces from Gaza, which lies largely in ruins after 15 months of fighting and Israeli bombardment.
Israel launched its campaign in Gaza following the Oct. 7 Hamas attack, when militants killed 1,200 people and took more than 250 hostages back to Gaza, according to Israeli tallies. Since then, more than 47,000 Palestinians have been killed in Gaza, according to health authorities there.
After the release on Sunday of hostages Romi Gonen, Emily Damari and Doron Steinbrecher and the recovery of the body of an Israeli soldier missing for a decade, Israel says 94 Israelis and foreigners remain held in Gaza. Around a third have been declared dead in absentia by Israeli authorities.
