A crowd cheered as masked militants brought two pale and dazed Israeli captives onto a rainy stage in front of cameras for the seventh hostage-prisoner exchange of the Gaza ceasefire Saturday.

Around the stage, Hamas fighters stood in an orderly fashion in the southern Gazan city of Rafah as the pair were handed over to the Red Cross, with Avera Mengistu, one of the two freed men, walking with apparent difficulty.

Like the hostages at previous liberations, Tal Shoham and Mengistu were handed liberation certificates in Hebrew before being helped into vehicles from the Red Cross, which acts as an intermediary, an AFP journalist reported.

A Hamas source told AFP that the Palestinian Islamist movement planned to release the other four living hostages from the Nuseirat refugee camp in central Gaza later in the morning.

In Rafah and Nuseirat, the militant group had prepared for a now well-rehearsed ceremony, building stages to parade the hostages to be released in front of large posters and billboards advertising its cause or praising fallen fighters.

In Rafah, Hamas fighters from the group's armed wing, the Al-Qassam Bridages, wearing fatigues, balaclavas and green headbands stood in a cordon around the handover area to keep the crowd out.

In a display of strength, some held Kalashnikov assault rifles and others flaunted hand-held rocket launchers, while Hamas' green flag flew around the square on buildings destroyed by war in the Palestinian territory.

Fidaa Awda, a resident of Rafah who attended the ceremony told AFP: "We say and continue to say that we are with the resistance, we are with the valiant Brigades, we are with the fighters."

War slogans

In front of a table covered by camouflage cloth on stage, US-made assault rifles of the kind the Israeli military uses were displayed, allegedly taken from Israeli soldiers in combat.

Behind the table, a conspicuously placed slogan read "We are the flood. We are the extreme strength" in Arabic, English and Hebrew.

The slogan referenced Operation Al-Aqsa flood, the name used by Hamas and its allied Palestinian factions for their October 7, 2023, attack on Israel that sparked the Gaza war.

Other banners showed fallen Hamas military commanders including former armed wing chief Muhammad Deif, killed by an Israeli air strike in 2024.

A poster below the stage read "and the red freedom has a door, struck by every bloodied hand".

The sentence is a verse from a 1926 anti-colonial poem by Egyptian poet Ahmad Shawqi which slain Hamas leader and 7 October mastermind Yahya Sinwar was seen reciting in a video taken during the Gaza war.

All around the square, hundreds of Gazans had gathered to watch the ceremony on this foggy, rainy winter morning.

Some stood on large chunks of concrete from nearby buildings demolished by bombs, others on the upper floors of buildings whose front walls had been torn off by explosions.

One man held a young boy clad in military fatigues and a Hamas headband as militants in arms paraded on the back of pickup trucks.

In a statement, Hamas praised the hostage releases and said that the Israeli public had two options.

"Either they receive their prisoners in coffins, as happened on Thursday, due to Netanyahu's arrogance, or they embrace their prisoners alive in commitment to the (Palestinian) resistance's conditions."

Sixty-five hostages taken during Hamas's 7 October attack are still being held in Gaza, including 35 who the Israeli military says are dead.