Israel's military on Monday received Edan Alexander, 21, from the International Committee of the Red Cross, which facilitated his transfer from Palestinian militant group Hamas.
He was taken to an Israeli military facility and joined by his family. Video showed that his mother, Yael Alexander, cried as she hugged him, saying: "How strong you are. I love you so much, Edan. We were so worried."
Alexander kissed and embraced his father, brother and sister as well. An Israeli Air Force helicopter then took Alexander and his family to a hospital where he was to receive treatment.
Alexander was the last living American held by Hamas and Israel's Channel 12 said his condition was "low", without citing a source. In photos provided by Israel, he looked pale but in good spirits.
Fighting halted at midday in Gaza after Israeli Prime Minister Benjamin Netanyahu said Israel would pause its operations to allow for the hostage release.
Palestinian health officials reported Israeli tank shelling and an air attack after the hostage handover, and there was no deal on a wider truce or hostage releases as monitors warned of famine in the devastated enclave.
After Israeli fire resumed, authorities in Gaza said an air strike killed three people and wounded several others at a shelter housing displaced families in Khan Younis in the southern Gaza Strip.
A woman was killed and several other people wounded when tank shells hit a school housing displaced families in the Tuffah neighbourhood in the north of Gaza.
Hamas said it freed Alexander as a goodwill gesture to US President Donald Trump, who is visiting the region this week.
"Edan Alexander, American hostage thought dead, to be released by Hamas. Great news!" Trump wrote on social media earlier on Monday.
Netanyahu said Alexander's release came thanks to Israel's military pressure in Gaza and political pressure by Trump.
In a photo taken on the military helicopter and released by Israel, Alexander held a sign reading: "Thank you, president Trump."
Netanyahu has said there will be no ceasefire and that plans to intensify military action in Gaza continued. "Israel has not committed to a ceasefire of any kind," Netanyahu's office said.
After growing up in New Jersey, Alexander, who has dual citizenship, moved to Israel and was serving in the Israeli army when he was captured in Hamas' 2023 attack.
Social media video on Monday showed people dancing in the square of his hometown of Tenafly, New Jersey, after word of his release.
The release, after four-way talks between Hamas, the United States, Egypt and Qatar, could open the way to freeing the remaining 58 hostages in the Gaza Strip, 19 months after Hamas' attack on Israel on October 7, 2023.
The Integrated Food Security Phase Classification, a global hunger monitor, reported on Monday that half a million people in the Gaza Strip face starvation and there is a critical risk of famine by September.
Trump is due to visit Gulf states on a trip that does not include Israel but special envoy Steve Witkoff, who helped arrange Alexander's release, was expected in Israel on Monday.
Israeli forces invaded Gaza after a Hamas-led assault on Israel in October 2023 that killed 1200 people and saw 251 taken hostage, according to Israeli tallies.
Since then, over 52,000 Palestinians have been killed, Palestinian authorities say, and large swathes of the heavily built-up enclave have been laid to waste.
