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Israel's military said on Sunday that it was reducing its numbers of soldiers from southern Gaza, leaving just one brigade in the area, BBC reported.
The military stressed a "significant force" would remain in Gaza.
The pull-out is being interpreted as tactical, rather than a sign the war may be moving closer to its end.Also on Sunday, Israel and Hamas said they had both sent delegations to Cairo to join fresh ceasefire negotiations.
It is six months to the day since Hamas attacked southern Israeli border communities on 7 October, killing 1,200 people and taking more than 250 hostage.
Israel says that of 130 hostages still in Gaza, at least 34 are dead.
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