Palestinian resistance fighters released three Israeli captives in exchange for hundreds of Palestinian prisoners freed by Israel, completing the latest swap despite fears the Gaza truce deal was near collapse.

An AFP journalist saw masked Hamas gunmen parade the captives onto a stage before a crowd 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.

Not long after, a busload of Palestinian prisoners departed Israel's Ofer Prison and were greeted by a cheering crowd in the occupied West Bank city of Ramallah, an AFP journalist said.

More buses took inmates from an Israeli prison in the Negev desert to the Gaza Strip, according to another AFP journalist.

Saturday's swap, the sixth since the truce took effect on January 19, came after Hamas had threatened to pause hostage releases over alleged Israeli violations, while Israel had threatened to resume the war if it did.

Out of 251 hostages seized during Hamas's October 7, 2023 attack on Israel, 70 remain in Gaza, including 35 the Israeli military says are dead.