US President Donald Trump has told cheering Israeli lawmakers that "this is the historic dawn of a new Middle East", after helping to broker a ceasefire between Israel and Hamas in Gaza.

During the first such address by a US president since 2008, Trump said Monday was a "day of profound joy" after "two harrowing years".

Trump's address to the Israeli parliament, the Knesset, comes on the day that the last 20 living hostages held in the Palestinian enclave were released by Hamas.

Israel is releasing 250 Palestinian prisoners and more than 1,700 other Palestinians detained during the two-year military operations in Gaza.

During a whirlwind trip to the region, Trump is also expected to attend a peace summit in Sharm El-Sheikh, Egypt, alongside Egyptian President Abdel Fattah al-Sisi and other world leaders.