Her family, in Sheikh Jarrah, Jerusalem, welcomes Nafoth Hammad on Monday. Reuters

A new group of hostages were freed on Tuesday from Gaza captivity in exchange for Palestinian prisoners under an extended truce, as mediators worked for a lasting halt to the seven-week Israel-Hamas war.

Ten Israelis and two foreigners were handed over to the Red Cross and were "inside Israeli territory", the army said.

An AFP journalist saw masked and armed fighters, some from Hamas and others from Islamic Jihad, hand over the released hostages to Red Cross officials in Rafah, near the border with Egypt.

A Palestinian prisoner reacts after being released from an Israeli jail in the occupied West Bank on Tuesday. AFP

International figures hailed the pause in hostilities and releases of captives as a cause for hope in the conflict sparked by Hamas attacks that prompted an Israeli military offensive in the Gaza Strip.

Israel and Hamas accused each other of violating the extended pause in incidents on Tuesday, though Qatari officials mediating in the conflict said this did not knock the truce off track.

This handout photo shows former Israeli hostage 12-year-old Eitan Yahalomi (right) reunited with his mother. AFP

As a two-day extension to the truce appeared to be holding on Tuesday, US and Israeli intelligence chiefs were in Doha, capital of Qatar, to discuss the "next phase" of the deal, a source briefed on their visit said.

Israel and Hamas are under international pressure not to return to all-out fighting when the latest truce ends on Thursday.

A source close to the Hamas earlier told AFP that Tuesday's group of 10 Israeli hostages would be freed in return for 30 prisoners held by Israel.

The release of the two foreign hostages came in addition to the release of the 10 Israelis under the terms of the deal.

The truce paused fighting that began on October 7 when Hamas poured over the border into Israel, killing 1,200 people, mostly civilians, and kidnapping about 240.

Israel's retaliatory ground and air operation in the Gaza Strip has killed almost 15,000 people, mostly civilians.