Gilad Shalit deal will see 1,000 Palestinian prisoners go free

Mashaal hailed the deal as "a national achievement for the whole Palestinian people" and warned that those Palestinians who were brought home would "return to the national struggle."

The swap was supported by the majority of the Israeli cabinet, although three ministers voted against it. Uzi Landau criticised it for giving Palestinians an "incentive to kill Israelis and to carry out further abductions".

Speaking to his cabinet last night, Mr Netanyahu said he had seen Sergeant Shalit's release as his "first priority" when he took office in 2009.

He said he did not wish to hide the "truth" about how difficult the decision to agree a swap had been.

"I feel for the families of victims of terror, I appreciate their suffering and distress, I am one of them," he said, referring to his brother Yoni Netanyahu, killed during israel's rescue of hostages in Entebbe.

"I believe that we have reached the best deal we could have at this time, when storms are sweeping the Middle East. I do not know if in the near future we would have been able to reach a better deal or any deal at all.

"It is very possible that this window of opportunity, that opened because of the circumstances, would close indefinitely and we would never have been able to bring Gilad home at all."

There were celebrations all night in Jerusalem at the tent where the soldier's parents have camped for months to keep pressure on the Netan ya hu government.

The family remained wary of celebrating too soon, but Gilad's brother Yoel said they were very excited.

Speaking as the country prepared for the festival of Succot, he said: "We hope this is our last holiday without Gilad."

The soldier was 19 when he was kidnapped and in August turned 25. He ha sso far been in captivity for five years and 109 days.