  The energy dissipation mechanism within Gamma-Ray Burst (GRB) outflows,
driving their extremely luminous prompt $\gamma$-ray emission is still
uncertain. The leading candidates are internal shocks and magnetic
reconnection. While the emission from internal shocks has been extensively
studied, that from reconnection still has few quantitative predictions. We
study the expected prompt-GRB emission from magnetic reconnection and compare
its temporal and spectral properties to observations. The main difference from
internal shocks is that for reconnection one expects relativistic bulk motions
with Lorentz factors $\Gamma'\gtrsim\;$a few in the jet's bulk frame. We
consider such motions of the emitting material in two anti-parallel directions
(e.g. of the reconnecting magnetic-field lines) within an ultra-relativistic
(with $\Gamma\gg1$) thin spherical reconnection layer. The emission's
relativistic beaming in the jet's frame greatly affects the light-curves. For
emission at radii $R_0<R<R_0+\Delta{}R$ (with $\Gamma=\rm{const}$) the observed
pulse width is $\Delta{}T\sim(R_0/2c\Gamma^2)\max(1/\Gamma',\,\Delta{}R/R_0)$,
i.e. up to $\sim\Gamma'$ times shorter than for isotropic emission in the jet's
frame. We consider two possible magnetic reconnection modes: a quasi
steady-state with continuous plasma flow into and out of the reconnection
layer, and sporadic reconnection in relativistic turbulence that produces
relativistic plasmoids. Both of these modes can account for many observed
prompt-GRB properties: variability, pulse asymmetry, the very rapid declines at
their end, and pulse evolutions that are either hard to soft (for
$\Gamma'\lesssim2$) or intensity tracking (for $\Gamma'>2$). However, the
relativistic turbulence mode is more likely to be relevant for the prompt
sub-MeV emission and can naturally account also for the peak
luminosity$\,$--$\,$peak frequency correlation.
