Prime Minister Anthony Albanese has said he
Prime Minister Anthony Albanese has said he "welcomes progress" on the US-backed Gaza peace proposal after Hamas agreed to release all Israeli hostages and affirmed its readiness to enter negotiations.

Prime Minister Anthony Albanese has welcomed a major development in the US-backed peace deal proposal for Gaza after Hamas agreed to release all Israeli hostages, both alive and dead. 

US President Donald Trump earlier this week said a peace deal was "beyond very close" to being reached as Israeli Prime Minister Benjamin Netanyahu agreed to back a 20-point proposal to end the conflict in Gaza.

Among the stipulations in the proposal was the release of Israeli hostages in Gaza - which Hamas has announced its "approval" of in a Telegram statement.

Mr Albanese said Australia "welcomes progress" but reiterated his government's call for terror group to agree to Trump's plan for peace. 

"We have consistently been part of international calls for a ceasefire, the return of hostages, and unimpeded humanitarian aid to reach those in need," the prime minister said in a statement shared to X on Saturday. 

"I reiterate our call on Hamas to agree to the plan, lay down its arms and release all remaining hostages without delay.

"Together with our partners, Australia will continue to support efforts to end the war and work towards a just and sustainable two-state solution."

pic.twitter.com/9NseSSNAUH

Other Western world leaders have also reacted to Hamas' response to the peace plan, with British Prime Minister Keir Starmer calling the move a "significant step".

"Hamas' acceptance of the US peace plan is a significant step forwards. We strongly support President Trump's efforts, which have brought us closer to peace than ever before," a statement from Mr Starmer posted on X said. 

"There is now an opportunity to end the fighting, for the hostages to return home, and for humanitarian aid to reach those who so desperately need it. We call on all sides to implement the agreement without delay."

Meanwhile, New Zealand Prime Minister Christopher Luxon relayed the country's call for an immediate end to the Gaza conflict.

"Thanks to the leadership of the United States and its Arab partners, the opportunity is there to end this catastrophic conflict," Mr Luxon said in a post on X.

"Today’s announcement by Hamas that it has agreed to release all the hostages is a very welcome step forward.

"All efforts must now be focused on realising the opportunity it presents. The priority remains the return of the hostages, an end to the fighting, and unfettered access to Gaza for humanitarian assistance."

Hamas has also agreed to hand over the administration of the Gaza Strip to an independent body of Palestinian technocrats based on "Palestinian national consensus and Arab and Islamic support".

A senior Hamas official Mousa Abu Marzouk was quoted in Arabic media saying that releasing all the living hostages and bodies within 72 hours was "theoretical and unrealistic," according to Israeli outlet i24 News. 

Following the White House press conference with the Israeli Prime Minister this week, Trump on Tuesday (local time) had given the terrorist group "three or four days" to respond to the proposal.

"Hamas is either going to be doing it or not, and if it’s not, it’s going to be a very sad end," President Trump said as he left the White House.