Hamas has agreed to release all remaining Israeli hostages, both dead and alive, under the terms of Donald Trump's proposed peace plan.

The terror group on Friday signalled a readiness to immediately enter negotiations to discuss details of the deal which includes proposals to hand over administration of the enclave.

In a statement, Hamas said it would release the hostages but said it would seek negotiations over many of the deal's other terms.

Mr Trump has not said whether the terms would be subject to negotiation, as Hamas is seeking.

Its agreement comes just hours after the US President gave the terror group an ultimatum to accept his terms or "all hell" would break loose.

Mr Trump told Hamas it had until 6pm deadline this Sunday to accept the terms of the proposed deal.

"An agreement must be reached with Hamas by Sunday Evening at 6pm, Washington DC time, every country has signed on," he wrote on Truth Social.

"If this last chance agreement is not reached, all hell, like no one has ever seen before, will break out against Hamas.

"There will be peace in the Middle East one way or the other."

Mr Trump has given Hamas till Sunday

The White House did not immediately respond to a request for comment on Hamas' response to the proposal, which is backed by Israel as well as Arab and European powers.

In its statement, Hamas said it appreciates Arab, Islamic, and international efforts, as well as the efforts of US President Donald Trump.

It went on to reiterate its agreement to hand over the administration of the Gaza Strip to an independent Palestinian body.

Hamas said that 'intensive discussion' has been underway