The first phase of the agreement is expected to last 42 days and involve the release of more captives and prisoners.
Israeli authorities have confirmed that Hamas handed over the first three female captives as part of a ceasefire deal for Gaza.
The captives, Romi Gonen, Emily Damari, and Doron Steinbrecher, were handed over to the Red Cross.
Thousands celebrated the ceasefire, marking an end to over 15 months of deadly Israeli attacks in Gaza.
Israeli PM Netanyahu has vowed to continue fighting, while preparations are underway for the release of more captives.
Al Jazeera reporter Ibrahim Khalili described scenes of joy among the crowd in Gaza.
The captives are set to undergo medical evaluations after being reunited with their families.
Hundreds of prisoners are expected to be released in exchange for the captured Israelis.
The ceasefire deal includes sending more humanitarian aid to Gaza to alleviate the crisis in the enclave.
Israel also recovered the body of a soldier, Oron Shaul, hours before the ceasefire.
