The Israeli military says it “continues to attack” inside the Gaza Strip as a dispute with Hamas delayed the start of a planned ceasefire.

Rear Adm. Daniel Hagari, the military’s chief spokesman, said the truce would not begin until Hamas hands over the names of three hostages to be released later on Sunday, echoing an earlier statement from Prime Minister Benjamin Netanyahu.

Israeli Prime Minister Benjamin Netanyahu said early on Sunday that the ceasefire in Gaza will not begin until Hamas provides the names of the three hostages it is set to release later on Sunday in exchange for scores of Palestinian prisoners.

It was unclear if the dispute had been resolved when the deadline for the truce to begin passed at 8.30am local time (5.30pm AEDT).

Israel meanwhile announced that it had recovered the body of Oron Shaul, a soldier who was killed in the 2014 Israel-Hamas war, in a special operation hours before the ceasefire was set to begin.

The bodies of Shaul and another soldier, Hadar Goldin, remained in Gaza after the 2014 war and had not been returned despite a public campaign by their families.

Netanyahu said he had instructed the military that the ceasefire “will not begin until Israel has in its possession the list of hostages to be freed, which Hamas committed to provide.”

He had issued a similar warning the night before.

Hamas blamed the delay in handing over the names on “technical field reasons.”

It said in a statement that it is committed to the ceasefire deal announced last week.

The planned ceasefire, agreed after a year of intensive mediation by the United States, Qatar and Egypt, is the first step in a long and fragile process aimed at winding down the 15-month war.

The 42-day first phase of the ceasefire should see a total of 33 hostages returned from Gaza and hundreds of Palestinian prisoners and detainees released.

Israeli forces should pull back into a buffer zone inside Gaza, and many displaced Palestinians should be able to return home.

The devastated territory should also see a surge in humanitarian aid.

This is just the second ceasefire in the war, longer and more consequential than the weeklong pause over a year ago, with the potential to end the fighting for good.

Negotiations on the far more difficult second phase of this ceasefire should begin in just over two weeks.

Major questions remain, including whether the war will resume after the six-week first phase and how the rest of the nearly 100 hostages in Gaza will be freed.

Palestinian residents began returning to their homes in parts of Gaza City early on Sunday, even as tank shelling continued to the east, closer to the Israeli border, overnight.

Families could be seen making their way back on foot, with their belongings loaded on donkey carts, residents said.

“The sound of shelling and explosions didn’t stop,” said Ahmed Matter, a Gaza City resident.

He said he saw many families leaving their shelters and returning to their homes. “People are impatient. They want this madness to end,” he said.

Israel’s Cabinet approved the ceasefire early Saturday in a rare session during the Jewish Sabbath, more than two days after mediators announced the deal.

The warring sides were under pressure from both the outgoing Biden administration and President-elect Donald Trump to achieve a deal before the US presidential inauguration on Monday.

The toll of the war has been immense, and new details on its scope will now emerge.

Over 46,000 Palestinians have been killed, according to Gaza’s Health Ministry.

The Oct. 7, 2023, Hamas-led attack on southern Israel that sparked the war killed over 1,200. Hundreds of Israeli soldiers have died.

Some 90 per cent of Gaza’s population has been displaced.

The United Nations says the health system, road network and other vital infrastructure have been badly damaged. Rebuilding – if the ceasefire reaches its final phase – will take several years at least.

Major questions about Gaza’s future, political and otherwise, remain unresolved.