Palestinians and Israelis in Australia have welcomed news of a US-brokered peace plan but the last two years of grief and trauma have left them anxious on whether it will come to fruition.

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Israeli-born Zach Shachar, whose cousin Naama Levy was abducted by Hamas before returning home in January after 477 days in captivity, said the deal brought a sense of relief.

"The final relief will be when all the hostages are home," he told AAP.

"I have more confidence that it will go ahead than before but everyone needs to understand that ... we are deali

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