A ceasefire in the Middle East is a welcome breakthrough, Australia's prime minister says, but the next steps to a lasting peace and recovery loom as tougher prospects.

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Israel's government approved the US-brokered ceasefire on Friday, with the agreement to come into effect within 24 hours.

Under the deal, Hamas will release the remaining Israeli hostages it has been holding in Gaza since October 7, 2023, and Israel will free nearly 2000 Palestinian prisoners.

Credit for the breakthrough belonged to US President Donald Trump for his leadership, Foreign Minister Penny Wong said.

"This has all been a result of the international momentum for p

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