The Palestinians were taken by bus to the Al-Oja/Nizana cargo crossing, south of the Rafah border terminal between Egypt and the Gaza Strip, which has been closed since Hamas's violent takeover of the territory mid-June.

From there they were to be taken through Israeli territory to the Erez terminal in the northern Gaza Strip.

Egypt and Israel on Saturday agreed that 600 of the stranded Palestinians, who have been living in increasingly dire conditions, would be allowed back to the Gaza Strip, with 100 to cross on Sunday and 500 on Monday.

Some 6,000 Palestinians are estimated to be living in and around Rafah, often lacking food, medical care and basic amenities, since the local border terminal closed over 45 days ago. More than 10 travellers have died.

The Rafah terminal -- Gaza's only door to the outside world that bypasses Israel -- has been shut since deadly Palestinian infighting saw Hamas seize the Gaza Strip on June 15.

When open, Rafah is operated in close cooperation by Egypt, European Union monitors, Israel and the Palestinians, and can be closed if any one party refuses to participate.

Hamas, which does not recognise Israel, has objected to the Jewish state being able to control who is allowed to travel from Egypt into the Gaza Strip.

There was no indication as to when the more than 5,000 Palestinians still stranded in Egypt might be allowed to return home.

Meanwhile, the Hamas government in the Gaza Strip will begin paying thousands of civil servants cut from the payroll of its moderate rival Fatah, officials said Saturday, further entrenching the divisions between the two Palestinian territories.

Hamas' takeover of Gaza, and Palestinian President Mahmoud Abbas' subsequent decision to dismiss the Hamas government, effectively set up two Palestinian administrations. Abbas has installed a Cabinet headed by US-backed Prime Minister Salam Fayyad that has control of the West Bank.

Hamas' payment of the salaries would further cement its rule over impoverished Gaza, where unemployment is about 40 percent and most of the 1.4 million people receive foreign food handouts. The money will go to thousands of members of Hamas' Executive Force, a Hamas militia that polices Gaza, and those civil servants who refused an order from Fayyad not to cooperate with the Islamic group.