The US envoy Steve Witkoff has announced the start of phase two of President Donald Trump's plan to end the war in Gaza, with a technocratic Palestinian government established in the territory.

Under phase one, Hamas and Israel agreed a ceasefire in October, as well as a hostage-prisoner exchange, a partial Israeli withdrawal, and an aid surge.

Witkoff said phase two would also see the reconstruction and full demilitarization of Gaza, including the disarmament of Hamas and other Palestinian groups.

The US expects Hamas to comply fully with its obligations, he warned, noting these include the return of the body of the last dead Israeli hostage. Failure to do so will bring serious consequences.

However, two key points of phase two could be problematic.

Hamas has previously refused to give up its weapons without the creation of an independent Palestinian state, and Israel has not committed to fully withdrawing from Gaza.

The ceasefire is also fragile at best, with both sides accusing each other of repeated violations. Almost 450 Palestinians have been killed in Israeli strikes since it came into force, according to Gaza's Hamas-run health ministry.

And humanitarian conditions in the territory remain dire, according to the UN, which has stressed the need for the unrestricted flow of critical supplies.

In his statement, Witkoff declared that with the launch of phase two of Trump's 20-point peace plan, Gaza was moving from ceasefire to demilitarisation, technocratic governance, and reconstruction.

Regional mediators Egypt, Qatar and Turkey welcomed the formation of the Palestinian Technocratic Committee to Administer the Gaza Strip, explaining that it would contribute to stabilizing efforts and improving humanitarian conditions.

The committee is to be headed by Ali Shaath, the first deputy planning minister in the Palestinian Authority (PA). Gaza's transitional administration will operate under the supervision of a Board of Peace, chaired by Trump.

Announced upcoming delegations are expected to clarify the board's initiatives, particularly during Trump's visit to the World Economic Forum in Davos next week.

Earlier on Wednesday, Hamas and Palestinian Islamic Jihad (PIJ) declared their support for the technocratic government, while the PA also expressed its backing. Vice-President Hussein al-Sheikh stressed the necessity of joint efforts among Palestinian factions to ensure the transitional government's success.

Israeli Prime Minister Benjamin Netanyahu's office confirmed he spoke with the parents of Ran Gvili, the last known Israeli hostage in Gaza, emphasizing their return as a primary concern. The Israeli government also highlighted that until the circumstances surrounding Gvili's remains are resolved, there would be no additional movements on the Rafah border crossing.