The first Palestinian prisoners freed in the West Bank and Gaza Strip as part of a landmark deal for the return of a captured Israeli soldier arrived home on Tuesday, an AFP reporter said.

Israel freed 477 Palestinian prisoners, most of them to the Gaza Strip, where Hamas leaders greeted former prisoners piling off buses bearing Red Cross insignia.

"We are going home with dignity, thank God," one prisoner told Egyptian television from the bus.

"Thank God for this great achievement. The Palestinian people deserve to live in freedom like everyone else," said another freed prisoner, thanking Egypt for mediating the deal.

"This (exchange deal) is the first step towards the full liberation of the Palestinian people," he said.

Three cars belonging to the Hamas movement followed by a Red Cross vehicle accompanied a convoy of eight buses carrying the prisoners to their waiting relatives in the southern Gaza Strip city of Rafah.

Buses carrying the first Palestinian prisoners to be freed in the West Bank headed towards the city of Ramallah on Tuesday, an AFP reporter said.

A convoy of several buses was heading to the seat of the Palestinian presidency, the Muqataa, in Ramallah, where the detainees were expected to be greeted by President Mahmoud Abbas.

Gaza’s Hamas government had earlier released captured Israeli soldier Gilad Shalit, who in an interview shortly after said he hoped the prisoner exchange could lead to peace between both sides.

Crowds gathered in both Gaza and the West Bank awaiting the return of their prisoners.

"This is the greatest joy for the Palestinian people," said Azzia al-Qawasmeh, awaiting at a West Bank checkpoint for her son Amer, who she said had been in prison for 24 years.

The landmark deal between Israel and Hamas will see Israel freeing a total of 1,027 prisoners in exchange for the release of Shalit, a soldier who has been held by Gaza militants for more than five years.

(Maan News)