Israel's military on Tuesday confirmed that all 12 - comprising 10 Israeli citizens and two foreign nationals - were with its special forces on Israeli territory.
The hostages were among some 240 people seized by Hamas gunmen during a rampage into southern Israel on October 7 in which they killed 1200 people.
Israel in return is expected shortly to free 30 Palestinian detainees from Israeli jails - 15 women and 15 teenage males, according to the Palestinian Prisoner's Club, a semi-official organisation.
A spokesman for the foreign ministry of Qatar, which is mediating in the conflict, said the freed Israeli hostages included nine women and one minor.
Many are using a truce to return to abandoned or destroyed homes, looking for anything recoverable. (AP PHOTO)
Some of the hostages were handed over by the Al Quds Brigades, the armed wing of the Palestinian Islamic Jihad movement, it said on Telegram.
The truce has brought Gaza its first respite after seven weeks of intensive Israeli bombardment prompted by the Hamas attack.
Gaza health authorities say more than 15,000 people have been confirmed killed in the Israeli onslaught on the Hamas-ruled territory, about 40 per cent of them children, with many more dead feared to be lost under rubble.
The truce had been due to expire overnight into Tuesday but both sides agreed to extend the pause to allow for the release of more hostages held by Hamas and of Palestinian prisoners held by Israel.
Israel has said the truce could be prolonged further, provided Hamas continues to free at least 10 Israeli hostages per day. But with fewer women and children still in captivity, keeping the guns quiet beyond Wednesday may require negotiating to free at least some Israeli men for the first time.
The total number of hostages released by Hamas since the start of the truce last Friday stands at 81, including 60 Israelis - all women and children - and 21 foreign nationals, many of them Thai farmworkers.
Israel had released 150 prisoners prior to Tuesday's moves.
On Tuesday, Israeli forces and Hamas fighters largely held their fire and both sides expressed their hope for further extensions of the pause in fighting that has reduced much of the Gaza Strip to a desolate moonscape.
Although conditions on the ground in Gaza remained largely peaceful, Israel's military said three explosive devices had been detonated on Tuesday afternoon near its troops in two different locations in the northern Gaza Strip, violating the truce terms.
More than two-thirds of Gaza's 2.3 million people have lost their homes to Israeli bombardments, with thousands of families sleeping rough in makeshift shelters with only the belongings they could carry.
Relatives of Israeli hostages want the urgent release of captives held by Gazan militant groups. (AP PHOTO)
When the war resumes, Israel has made clear it intends to press on with its assault from the northern half of Gaza into the south. US officials said they have told their ally to be more careful protecting civilians as its forces press on.
Israel's siege has led to the collapse of Gaza's health care system, especially in the north where no hospitals remain functioning. The World Health Organisation said more Gazans could soon be dying of disease than from bombing.
There were already a very high number of cases of infants suffering from diarrhoea, said WHO spokesperson Margaret Harris: "No medicines, no vaccination activities, no access to safe water and hygiene and no food."
Among Israeli hostages yet to be freed was 10-month-old baby Kfir Bibas, along with his four-year-old brother Ariel and their parents Yarden and Shiri, bundled from a kibbutz by gunmen on October 7.
Yarden's sister told reporters relatives had learned the family would not be in the group to go free on Tuesday.
Israeli officials said they believed the family was being held by a militant group other than Hamas.
"Kfir... is a child who still doesn't even know how to say 'Mummy'," Jimmy Miller, a cousin, told Channel 12 TV.
"We in the family are not managing to function. The family hasn't slept for a long, long time already - 51 days."
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