Thousands of Palestinians continued to travel north towards Gaza City, the focus of Israeli attacks over the past two months, hopeful the ceasefire would bring an end to the war.
"There is a lot of joy among the people," said Abdou Abu Seada, adding that the joy was tempered by exhaustion after two years of war that has destroyed much of the Gaza Strip.
Government spokeswoman Shosh Bedrosian said that Israel expected the hostages to start being released early on Monday morning with the 20 living hostages to be released together.
In the event that hostages were released earlier, Israel was ready to receive them, she said.
Their release is to be followed later by the handover of bodies of the remaining 28 deceased hostages.
A Hamas source told the DPA news agency it planned to hand over all living hostages, as well as as many deceased hostages as possible, by 6am local time (2pm AEDT) on Monday.
Hamas plans to hand over the living hostages to staff from the International Committee of the Red Cross, without a public ceremony or media presence, at three different locations in the Gaza Strip.
Under the ceasefire agreement, Hamas is due by noon on Monday to release the remaining hostages, taken captive on October 7, 2023, when the group's militants launched a surprise attack on Israel that ignited the war.
Israel's hostages co-ordinator Gal Hirsch on Thursday said a task force would be formed to help find the remains of any dead hostages that Hamas could not locate.
Trump is due to arrive in Israel on Monday to address the Knesset, the parliament, before travelling to Sharm El Sheikh in Egypt for a world leaders' summit on ending the Gaza Strip war.
US envoy Steve Witkoff and Jared Kushner addressed a rally in Tel Aviv on Saturday, which many Israelis hoped would be the final one urging the release of hostages and an end to the war.
The United States, along with Egypt, Qatar and Turkey, mediated what has been described as a first phase agreement between Israel and Hamas for a ceasefire and the release of hostages by Hamas and prisoners and detainees by Israel.
"For two years we (have been) waiting for this day for this moment... All of us feel happy for the family, for the hostages, that finally .. we will see them," said demonstrator Dalia Yosef, thanking Trump.
The Israel Prison Service said it had transferred some Palestinian prisoners to other facilities ahead of their expected release.
The Israeli Ministry of Justice has released the names of 250 Palestinians, convicted of murder and other serious crimes, who are to be freed under the deal.
The list does not include senior Hamas commanders that the militant group had sought to free, or prominent figures from other factions such as Marwan al-Barghouti or Ahmed Saadat.
Although that was not expected to derail the agreement, Hamas' prisoners information office said that talks with Israeli mediators over the list of prisoners to be freed were ongoing.
Israel is also to release 1700 Palestinians who have been detained in the Gaza Strip since October 7, 2023 and 22 Palestinian minors, along with the bodies of 360 militants.
Israeli government spokeswoman Bedrosian said the prisoners would be released once the living hostages reach Israeli territory.
Israeli Defence Minister Israel Katz said that once the hostages were returned, the military would destroy underground tunnels in the Gaza Strip built by Hamas.
Eri Kaneko, a spokeswoman for the United Nations' Office for the Coordination of Humanitarian Affairs, said cooking gas supplies entered the Gaza Strip on Sunday for the first time since March.
Other aid moving through included flour, fruit and meat.
with DPA and AP
