Palestinians are returning to areas ruined by 15 months of war after Israel and Hamas resolved a dispute over hostages that threatened to derail the ceasefire.

The president expanded on a controversial idea that was rejected by the Arab states and would represent a significant shift in U.S. policy.

Tens of thousands of Palestinians streamed into the most heavily destroyed part of the Gaza Strip on Monday as Israel lifted its closure of the north for the first time since the early weeks of the 15-month war with Hamas in accordance with a fragile ceasefire.

Tens of thousands of displaced Palestinians began returning home to northern Gaza on Monday, bracing for what awaits them in a region that has been reduced to rubble by months of brutal bombardment and fighting.

Trump floated the idea on Saturday, saying he would urge the leaders of the two Arab countries to take in Gaza’s now largely homeless population, so that “we just clean out that whole thing.”

Israel allowed displaced Gazans to begin crossing a military zone that bisects the enclave after a deadlock over hostage releases was broken.

Israel on Monday began permitting thousands of Palestinians to return to the devastated northern Gaza Strip for the first time since the early weeks of the 15-month conflict between Israel and the militant group Hamas. The move comes as part of a fragile ceasefire agreement currently in place.

Asked for a reaction to Trump's comments, a foreign ministry spokesperson said Berlin shared the view of "the European Union, our Arab partners, the United Nations ... that the Palestinian population must not be expelled from Gaza and Gaza must not be permanently occupied or recolonised by Israel."

An idea floated by US President Donald Trump to move Gazans to Egypt or Jordan faced a renewed backlash Tuesday as hundreds of thousands of Gazans displaced by the Israel-Hamas war returned to their devastated neighbourhoods.

Ali Abunimah, executive director of Chicago-based Electronic Intifada, was released by Swiss authorities on Monday and put on a plane bound for Istanbul after being held in detention for three days in Zürich.

The announcement came as the United States pressures Israel and Hamas to continue a ceasefire that has paused a devastating 15-month war in Gaza.