(Updates with Palestinians crossing into Gaza, pvs ISMAILIA)

By Nidal al-Mughrabi

GAZA, July 29 (Reuters) - Israel allowed around 100 Palestinians stranded for weeks in Egypt to return to the Hamas-held Gaza Strip through the Jewish state on Sunday, the first of some 600 expected to return home in the coming days.

Palestinian officials estimate 6,000 Palestinians have been waiting on the Egyptian side of the border since Hamas seized control of the Gaza Strip from forces loyal to President Mahmoud Abbas's Fatah faction on June 14.

The first 100 Palestinians crossed into Israel from Egypt and were transported through Israel, where they were given food and water, to a key Gaza border crossing.

"I am happy to return to Gaza," Abu Ziad, one of those who returned, told Reuters by telephone as he was leaving Egypt. "My money ran out a while ago and I was about to resort to sleeping on the street."

The Egyptian Red Crescent says roughly 5,000 Palestinians have been stranded in Egypt's Sinai desert since the border's closure June 9, shortly before Hamas Islamists seized Gaza.

Palestinian officials estimate the number of stranded Gazans at between 6,000 and 7,000. Many were visiting Egypt on business or to receive medical care.

Youssef Abu Tayem said as he crossed into Gaza he was glad to be home but wary that the coastal strip was "a big prison".

"We escaped the suffering outside, but will suffer now again," he said, lamenting that Gaza's crossings to Egypt and Israel are often shut.

Hamas rejected the deal between Israel, Abbas and Egypt to open other crossings instead of Rafah to permit the Palestinians to return, saying it set a dangerous precedent by reducing pressure on the Jewish state to reopen Rafah any time soon.

Hamas and other militant groups fear its supporters will be locked out of Gaza for good if Rafah remains closed.

"Replacing Rafah crossing with another under Israel's control is a crime which our people will never forgive," Hamas and Islamic Jihad said in a joint statement.

"It is an ugly exploitation of our people."

Many Palestinians see Rafah, Gaza's only direct crossing to the outside world that does not go through Israel, as a symbol of sovereignty.

Rafah was technically controlled by Abbas's forces before Hamas's takeover, though Israel frequently shut it down, citing security reasons.

Nabil Amr, an aide to Palestinian President Mahmoud Abbas, said another group of 500 Palestinians will return to Gaza on Tuesday.

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