JERUSALEM/CAIRO, Oct 13 (Reuters): Palestinian militant group Hamas released the first seven surviving Israeli hostages on Monday, an official involved in the operation said, the initial phase of a ceasefire agreement that U.S. President Donald Trump helped to broker aimed at ending the conflict in Gaza.

The truce and the exchange of both hostages and prisoners follow two years of war that evolved into a regional conflict, drawing in countries such as Iran, Yemen and Lebanon, while deepening Israel's international isolation and reshaping the Middle East.

The seven hostages had been transferred to the International Committee of the Red Cross from the armed wing of Hamas in Gaza, the official said.

The handover of the 13 remaining surviving hostages, plus 28 other Israeli hostages — 26 dead and two whose fate is unknown - is expected to follow.

Under the agreement, Israel was set to release almost 2,000 Palestinian detainees and convicted prisoners from its jails later on Monday.

Those 1,966 detainees boarded buses at Israeli prisons and most were expected to be released at Gaza's Nasser Hospital on Monday, an official involved in the operation said.

About a dozen masked gunmen dressed in black, apparently members of Hamas' armed wing, arrived at Nasser Hospital in southern Gaza, Reuters footage showed

In Israel, people waving Israeli flags gathered near Reim, a military camp near Gaza, where hostages will be brought and then taken to hospitals.

Hundreds of people gathered at Tel Aviv's Hostages Square, cheering and waving Israeli flags and holding up posters of the hostages.

"The war is over," Trump told reporters aboard Air Force One as he flew from Washington to Israel on Sunday. Asked about prospects for the region, he said: "I think it's going to normalise."

Trump is set for a hero's welcome when he addresses Israel's parliament later on Monday. He will be awarded Israel’s highest civilian honour later this year, Israel's President Isaac Herzog said.

Photo from Reuters