BBC News with Sue Montgomery

The Israeli soldier Gilad Shalit, held captive in Gaza for more than five years, is now back at home after being reunited with his family in Israel. Crowds of people in his hometown Mitzpe Hila gathered along the road leading to his house. Outside the building is the BBC's Richard Galpin.

They've been dancing; they've been singing. At the moment, I can see them waving the Israeli flags. And after the helicopter landed just outside the village, they brought Gilad Shalit in through the streets of this village, which were lined by the people who live here. They were showering the vehicles with flowers; they had champagne bottles which they were opening and spraying the vehicles with champagne.

Sergeant Shalit has been released in exchange for hundreds of Palestinian prisoners in Israeli jails. The Israeli Prime Minister Benjamin Netanyahu described the deal reached with Hamas as a very difficult decision. On the Palestinian side, more than 100,000 people gathered in the main square in Gaza City to celebrate the release of almost 500 prisoners freed in exchange for Gilad Shalit. The BBC's Jon Donnison is there.

You've got a mass Hamas rally. Well over 100,000 people packed into Katiba Square in the centre of Gaza City, waving the Hamas green Palestinian flags, and on the stage behind them, you do have some of those Palestinian prisoners who are being given really a huge welcoming rally.

Speaking in Cairo, the Hamas leader Khaled Meshaal said the group had scored a strategic victory over Israel. Our Middle East editor Jeremy Bowen reflects on the day's events.