Palestinian militants released three Israeli hostages on Saturday in exchange for hundreds of Palestinian inmates freed by Israel, completing the latest swap despite fears the Gaza truce deal was near collapse.

Masked Hamas gunmen paraded the hostages on a stage in Gaza's southern city of Khan Younis. Israeli-American Sagui Dekel-Chen, Israeli-Russian Sasha Trupanov and Israeli-Argentine Yair Horn were made to make statements into a microphone before being handed over to the Red Cross and taken back home to Israeli territory, after being held for more than 16 months.

Clutching gift bags given by their captors, the three men, flanked by fighters, called for the completion of further hostage exchanges under the ceasefire deal.