An Israeli security official says four bodies have been transferred to the Red Cross by Hamas.
Israel is now expected to release hundreds of Palestinian prisoners in the coming hours in exchange.
Footage taken in the early hours of Thursday local time showed a group of Palestinian prisoners disembarking from a Red Cross vehicle in Ramallah, in the occupied West Bank, to the cheers of a jubilant crowd, but it is unclear how many have been released.
This is the final release of hostages and Palestinian prisoners under Phase 1 of the ceasefire deal Hamas and Israel agreed last month.
Officially, that truce ends on Saturday. It is unclear whether talks on extending the ceasefire have begun.
Israel has not said publicly whether it has identified the bodies handed over by Hamas.
Earlier, Israel said it would send a team of experts from the National Center for Forensic Medicine to the Kerem Shalom border crossing “to assist in identifying the deceased hostages.”
A previous release caused uproar when one of the bodies handed over by Hamas – that was supposed to be that of the hostage Shiri Bibas – was found instead to be that of an unidentified Gazan woman. Hamas later blamed a mix-up and returned Bibas’ body.
If the four bodies are identified as belonging to the hostages, the release would mean that Hamas and its allies now hold 59 captives according to Israeli figures. Of those, more than half are thought to be dead by the Israeli government. One, Hadar Goldin, has been held, dead, since before October 7, 2023.
Hamas’ military wing, the Qassam Brigades, said earlier on Wednesday that the remains of Tsachi Idan, Itzhak Elgarat, Ohad Yahalomi and Shlomo Mantzur would be handed over.
The Israeli military has previously said that Mantzur, who at 85 was the oldest hostage taken on October 7, 2023, was killed during the Hamas-led attack and his body was held in Gaza. It had not confirmed the deaths of the others.
The latest transfer was held in private after the Israeli Prime Minister’s Office said an agreement had been reached for the four to be returned “in an agreed-upon procedure and without Hamas ceremonies.”
The handover had been in doubt since Saturday, when Israel failed to release more than 600 Palestinians prisoners and detainees in protest at what it said were “humiliating ceremonies” conducted by Hamas during previous releases.
Earlier Saturday, Hamas had released six Israeli hostages from Gaza in two public ceremonies and one private transfer, in what was the final return of living hostages in the first phase of a ceasefire deal that began last month.
Among the Palestinians due for release is Nael Barghouti, the longest-serving Palestinian political prisoner. Nael has been in and out of prison since he was first arrested in 1978 and accused of engaging in attacks against the Israeli military.
He was released in a 2011 Israel-Hamas deal, which saw 1,100 Palestinians exchanged for one Israeli soldier held by Hamas for five years, Gilad Shalit. Nael was re-arrested by Israeli forces in 2014 for “Hamas membership,” according to Israeli media, and has since been serving a life sentence.
The society said 151 prisoners serving life sentences and long sentences were due to be released to the Israeli-occupied West Bank, Jerusalem or sent into exile. Among them is Bilal Abu Ghanem, who is serving concurrent life sentences for the murder of three Israelis on a Jerusalem bus in 2015.
This is a developing story and will be updated.
Lauren Izso contributed reporting.