By Mohammed Salem, Nidal al-Mughrabi and James Mackenzie

GAZA/CAIRO/JERUSALEM (Reuters) -Palestinians burst into streets to celebrate and began returning to the rubble of bombed-out homes on Sunday after a ceasefire deal halted fighting in Gaza, while three female hostages freed by Hamas were reunited with their mothers inside Israel.

Armed Hamas fighters drove through the southern city of Khan Younis with crowds cheering and chanting. In the north of the territory, bombed into oblivion in the war's most intense fighting, people picked their way on narrow roads through a devastated landscape of rubble and twisted metal.

"I feel like at last I found some water to drink after being lost in the desert for 15 months," said Aya, a displaced woman from Gaza City who has been sheltering in Deir Al-Balah in the central Gaza Strip for over a year.

In Tel Aviv, hundreds of Israelis in a square outside the defence headquarters watched a live broadcast from Gaza showing the hostage release on a giant screen. The crowd cheered, embraced and wept as three female hostages could be seen getting into a Red Cross vehicle surrounded by armed Hamas fighters.

Soon after, the Israeli military said Romi Gonen, Doron Steinbrecher and Emily Damari had been reunited with their mothers at a meeting point inside Israel, close to the kibbutz and nearby music festival where they had been abducted in the Oct. 7, 2023 Hamas raid that precipitated the war.

The three appeared in good health in a video later released by the military. Damari, who lost two fingers when she was shot the day she was abducted, could be seen smiling and embracing her mother as she held up a bandaged hand.

"I would like you to tell them: Romi, Doron and Emily – an entire nation embraces you. Welcome home," Prime Minister Benjamin Netanyahu told a commander by phone as the hostages were driven across the border.

In the Israeli-occupied West Bank, buses awaited the release of Palestinian prisoners from Israeli detention. Hamas said the first group to be freed in exchange for the hostages includes 69 women and 21 teenage boys.

The first phase of the truce in the 15-month-old war between Israel and Hamas took effect following a three-hour delay during which Israeli warplanes and artillery pounded the Gaza Strip.

That last-minute Israeli blitz killed 13 people, according to Palestinian health authorities. Israel blamed Hamas for being late to deliver the names of hostages it would free, and said it had struck terrorists. Hamas said the holdup in providing the list was technical.

"Today the guns in Gaza have gone silent," U.S. President Joe Biden said on his last full day in office, welcoming a truce that had eluded U.S. diplomacy for more than a year.

"It was a long road," Biden said. "But we've reached this point today because of the pressure Israel built on Hamas, backed by the United States."

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The truce calls for fighting to stop, aid to be sent in to Gaza and 33 of nearly 100 Israeli and foreign hostages to go free over the six-week first phase in return for nearly 2,000 Palestinian prisoners held in Israeli jails.

For Hamas, the truce could provide an opportunity to emerge from the shadows after 15 months in hiding. Hamas policemen dressed in blue police uniform swiftly deployed in some areas.

People who had gathered to cheer the fighters chanted "Greetings to Al-Qassam Brigades" - the group's armed wing.

"All the resistance factions are staying in spite of Netanyahu," one fighter told Reuters.

TRUMP AIDE: 'HAMAS WILL NEVER GOVERN GAZA'

There is no detailed plan in place to govern Gaza after the war, much less rebuild it. Any return of Hamas will test the patience of Israel, which has said it will resume fighting unless the militant group is fully dismantled.

Hardline National Security Minister Itamar Ben-Gvir quit the cabinet over the ceasefire, though his party said it would not try to bring down Netanyahu's government. The other most prominent hardliner, Finance Minister Bezalel Smotrich, stayed in the government but said he would quit if the war ends without Hamas completely destroyed.

The truce came into effect on the eve of the inauguration of U.S. President-elect Donald Trump. Trump's national security adviser-designate, Mike Waltz, said that if Hamas reneges on the agreement, the United States would support Israel "in doing what it has to do."

"Hamas will never govern Gaza. That is completely unacceptable."

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The streets in shattered Gaza City in the north of the territory were already busy with groups of people waving the Palestinian flag and filming the scenes on their mobile phones. Several carts loaded with household possessions travelled down a thoroughfare scattered with rubble and debris.

Ahmed Abu Ayham, 40, a Gaza City native sheltering in Khan Younis, said that while the ceasefire may have spared lives, the losses and destruction made it no time for celebrations.

"We are in pain, deep pain and it is time to hug one another and cry," he said.

In a pocket of Rafah that was relatively spared, Ahmed Abou Mohsen, 20, and his family returned to their abandoned home and were unpacking from the back of an open-backed white truck piled with bags of clothes, jerry cans and mattresses.

"It is an indescribable feeling, a complete joy," he said. Though he added that those in nearby areas whose homes had been completely destroyed would not share their happiness.

Long lines of trucks carrying fuel and aid supplies queued up at border crossings in the hours before the ceasefire. The World Food Programme said they began to cross on Sunday morning.

The war between Israel and Hamas began after the militants stormed Israeli towns and villages on Oct. 7, 2023, killing 1,200 people and capturing more than 250 hostages, according to Israeli tallies.

More than 47,000 Palestinians have since been killed in Israeli attacks, according to medical officials in the enclave. Nearly the entire 2.3 million population of Gaza is homeless. Around 400 Israeli soldiers have also died.

(Reporting by James Mackenzie, Maayan Lubell, Emily Rose, Andrew Mills, Menna Alaa al-Din, Nidal al-Mughrabi, Alexander Cornwell; Writing by Peter Graff, Nidal al-Mughrabi, John Davison; editing by Philippa Fletcher and Sharon Singleton)

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