Israel and Hamas will swap prisoners for hostages in the first stage of a plan agreed by both sides. Photo: Bianca De Marchi/AAP PHOTOS

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 c

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