Israel declared a ceasefire and started pulling back troops in Gaza on Friday, as thousands of displaced Palestinians began to trek back to their wrecked homes.

After two years of brutal war, the families of Israel's remaining hostages in the territory were also hoping the truce -- pushed by US President Donald Trump -- would hold.

The Israeli army said its troops had ceased fire at noon (0900 GMT) "in preparation for the ceasefire agreement and the return of hostages".

Three hours later, the US Pentagon confirmed Israel had completed the first phase of a pullback laid out in Trump's peace plan. Israeli forces still hold around 53 percent of the Palestinian territory.

The withdrawal set the clock running on a 72-hour deadline for Hamas to release the remaining hostages held in Gaza.

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