Australia has hailed US President Donald Trump’s “incredible achievement” in ending Israel’s war on Gaza and securing the release of the remaining hostages held by Hamas.

Trump and world leaders signed the Gaza ceasefire deal on Tuesday (AEDT) amid jubilant and emotional reunions.

The surviving 20 Israeli hostages captured in the October 7, 2023, attacks were released, while nearly 2000 Palestinian prisoners and detainees were returned in exchange.

Across Israel and Gaza, families that had been separated for years on both sides of the conflict were reunited.

One young hostage, whose desperate cries on the back of a motorcycle became one of the most haunting images of the horror Nova music festival attack, welcomed home her newly freed boyfriend.

Noa Argamani, 28, who was rescued by Israeli forces in June last year, opened her arms to Avinatan Or. Videos showed them embracing and kissing, apparently overwhelmed by the moment.

Footage of Argamani being kidnapped on a motorcycle, pleading for her life and reaching desperately towards Or as he marched alongside, circulated across the globe soon after the October 7 attack.

Acting Prime Minister Richard Marles said the peace breakthrough was a “wonderful day” after an “appalling tragedy”.

“It is an incredible achievement on the part of Donald Trump and it is one that is very much going to be remembered by history,” he told Sky News on Tuesday.

Foreign Minister Penny Wong called it the “biggest step towards peace in the Middle East that we’ve seen in a generation”.

“But we call on all parties to discharge their responsibilities under the agreement and we welcome and congratulate the United States and the US President, in particular, on playing this decisive role.

Wong said the release of hostages was a “day of relief and a day of joy”.

“It’s also a day of immense grief for those who do not have someone coming home and we want to recognise that and say that our hearts go out to them,” she said.

“We all hope for peace in the Middle East and may this work continue. May this work continue.”

There was one sticking point when Hamas announced that the bodies of only four dead hostages would be returned, in breach of its commitments to hand over the remains of all the Israelis it took captive.

Palestinian prisoners are back in the arms of their loved ones. Photo: AAP

Despite that, the return of the living hostages has been celebrated halfway across the world, with Jewish Australians optimistic it can lead to long-term peace.

Melbourne’s Jewish community packed into the Beth Weizmann Jewish Community Centre in Caulfield to sing, dance and watch a live stream of the scenes in Israel.

The crowd of about 1000 cheered as Air Force One touched down at Ben Gurion Airport carrying Trump, who addressed the Knesset after helping to broker the ceasefire.

Eda Klapisch, the daughter of Holocaust survivors, said her sense of relief was tinged with “terrible sadness” because of the damage done to Israeli and Palestinian society.

“No one wanted this,” she said.

“No one wanted to be held for 738 days, nobody wanted to be bombed to smithereens.

“If we can find peace, the people of Israel will be the first ones in line to sign.”

Israel launched a two-year military offensive on Gaza that killed more than 67,000 people including about 20,000 children, according to Palestinian health authorities.

The campaign was in response to Hamas’s surprise attack, which killed about 1200 people and led to the capture of another 250 hostages, according to Israeli officials.

Klapisch, who was born in Sydney but has lived in Melbourne for about 50 years, said she had visited Hostage Square in Tel Aviv and described the emotion as extraordinary.

“I’m not the biggest fan of Donald Trump but I’m grateful for what he’s done for us,” she said.

“Thank God he had the ability to do that end step.”

Malka Lawrence said the moment was a “huge relief” mixed with disbelief at the inaction of local and international politicians in the past two years.

“They could have stopped all this,” she said, noting not all hostages were being returned alive.

“There’s enormous gratitude … but there’s still shock, horror that we had to go through those two years.”

However, she was confident the Jewish community across the globe could let bygones be bygones.

“They’re wonderful at forgiving and forgetting,” Lawrence said.

“Look at our relationship with Germany. We move on and we’re such amazingly resilient people.”

-with AAP