Palestinian militant group Hamas would release all hostages while Israel would pull its troops back to an agreed-on line, Trump said after talks in Egypt on his 20-point peace plan resulted in a deal.

"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 his Truth Social network.

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"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 also thanked mediators Qatar, Egypt, and Turkey, adding: "BLESSED ARE THE PEACEMAKERS!"

Mediators said Israel and Hamas had reached a deal for a hostage-prisoner exchange and aid entry into Gaza, Egyptian state-linked media reported.

Trump said earlier that he may travel to the Middle East later this week as a deal was "very close".

In a dramatic moment, AFP journalists saw Secretary of State Marco Rubio interrupt an event at the White House and hand Trump an urgent note about the progress of the negotiations in Egypt.

"I may go there sometime toward the end of the week, maybe on Sunday," Trump said, adding that he was "most likely" to turn up in Egypt but would also consider going to war-torn Gaza.

Trump's plan called for a ceasefire, the release of all the hostages held in Gaza, Hamas' disarmament, and a gradual Israeli withdrawal from the territory.

Trump's son-in-law, Jared Kushner, and Middle East envoy Steve Witkoff arrived at the talks earlier.

As night fell in the coastal area of Al-Mawasi in southern Gaza, an AFP contributor described an atmosphere of anticipation before the announcement, with joyful chants of "Allahu akbar", meaning God is the greatest, and some celebratory gunfire into the air.

"We're closely following every bit of news about the negotiations and the ceasefire," said 50-year-old Mohammed Zamlot, who had been displaced from northern Gaza.

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

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In exchange, Hamas is set to free the remaining 47 hostages, both alive and dead, who were seized in its October 7, 2023, attack on Israel.

Qatar's prime minister and Turkey's intelligence chief were also expected at the talks on Wednesday.

Hamas said it would be joined by delegations from Islamic Jihad – which has also held some of the hostages in Gaza – as well as the Popular Front for the Liberation of Palestine.

The negotiations were taking place under the shadow of the second anniversary of the 2023 Hamas attack, after which Israel launched an all-out war on Gaza that numerous legal experts, international bodies, and scholars have deemed genocidal.

Gaza's civil defense agency said the bombardment of the Palestinian territory had not stopped in the hours before the deal. An AFP journalist in Israel near the Gaza border reported hearing multiple explosions in the morning.