The seventh named storm of the 1996–97 South-West Indian Ocean cyclone season, Gretelle developed within the Intertropical Convergence Zone on 19 January, and gradually intensified while moving southwestward.

On 22 January, the storm intensified to tropical cyclone status while passing northwest of Réunion; there, Gretelle produced strong wind gusts and heavy rainfall in mountainous regions.

Gretelle meandered off the coast of Mozambique, bringing gusty winds that downed trees, but caused little damage in the country.

[3] Due to a large ridge centered near Île Amsterdam, the storm tracked generally southwestward toward the Mascarene Islands.

[4] Shortly after attaining tropical cyclone status, Gretelle made its closest point of approach to Réunion late on 22 January, passing about 300 km (190 mi) northwest of the island.

Subsequently, the cyclone developed a small eye,[1] and the MFR estimated peak 10-minute winds of 140 km/h (85 mph) at 0000 UTC on 23 January.

Meanwhile, the JTWC estimated Gretelle continued to intensify to a 1-minute sustained wind peak of 215 km/h (135 mph) at 0600 UTC on 24 January, equivalent to a Category 4 hurricane on the Saffir–Simpson scale.

[1] Reports from the United Nations Department of Humanitarian Affairs considered Gretelle the first cyclone to strike the region in 41 years.

[1] The next day, the JTWC briefly re-upgraded Gretelle to the equivalent of a minimal hurricane, and on 30 January, the MFO estimated a secondary 10-minute wind peak of 85 km/h (55 mph).

The storm also dropped heavy rainfall, although peak totals were unknown due to the meteorological station in Farafangana being destroyed.

[13] Reports from the Red Cross indicated that Gretelle was the severest in the region "in living memory", with many people surviving the high tides and winds by "clinging to trees".

[13] A plane of relief supplies flew from the capital Antananarivo to Manakara along the southeast coast, where trucks distributed the items to the affected areas.

A radio station based out of the country criticized the slow pace of relief, citing the lack of available boats after many were destroyed.

Farmers grew additional beans and potatoes to compensate for the damaged crops, while the quick distribution of food prevented significant malnutrition.

[17] In the subsequent years, about 40% of the forest at Manombo that regrew following Gretelle was of foreign nature, which threatened the original plants in the region.