An Israeli airstrike on Wednesday killed at least three Palestinians in Tubas in the occupied West Bank, Palestinian Red Crescent said, adding there were also a number of injuries reported.

Egypt will not participate in the displacement of Palestinians, an "act of injustice" that would threaten Egyptian security, President Abdel Fattah Al-Sisi said on Wednesday in his first public response to U.

After a ceasefire deal paused 15 months of war in Gaza, hundreds of thousands of Palestinians returned to the rubble of their homes.

The Palestinian Health Ministry says two Palestinians were killed by Israeli fire in the occupied West Bank overnight and into Wednesday.

The president expanded on a controversial idea that was rejected by the Arab states and would represent a significant shift in U.S. policy.

Israel on Monday began permitting thousands of Palestinians to return to the devastated northern Gaza Strip for the first time since the early weeks of the 15-month conflict between Israel and the militant group Hamas. The move comes as part of a fragile ceasefire agreement currently in place.

Asked for a reaction to Trump's comments, a foreign ministry spokesperson said Berlin shared the view of "the European Union, our Arab partners, the United Nations ... that the Palestinian population must not be expelled from Gaza and Gaza must not be permanently occupied or recolonised by Israel."

Militant group Hamas has hailed the return of thousands of displaced people to northern Gaza a "victory", as Palestinians gathered with their belongings to return to the strip for the first time since the war began.

They returned under a ceasefire deal between Israel and Hamas, walking for hours to reach the bombed-out landscape.

Hamas is set to free three more Israeli hostages as well as five Thai captives on Thursday, and Israel is to release another 110 Palestinian prisoners, in the third such exchange since a ceasefire in the Gaza Strip took hold earlier this month.

Israeli authorities said they would stop working Thursday with the main United Nations agency caring for Palestinian refugees, threatening aid deliveries for Gaza that are a key part of the cease-fire deal.