Israeli police said that rockets continued to rain down on southern Israel, with the latest falling well after the reported deadline for the truce to take effect.
Police spokesman Micky Rosenfeld told AFP that 12 rockets were fired into Israel since midnight, the last, shortly before 7:00 am. None of them caused casualties.
Sources close to Gaza's ruling Hamas movement and to Islamic Jihad, which was at the forefront of fierce cross-border fighting on Saturday said that Egyptian intelligence officials helped broker a ceasefire due to take hold at 6:00 am (0400 GMT).
"The efforts and intensive contacts led by senior Egyptian intelligence service officials led to a national consensus to restore calm" with Israel, a leader of one Palestinian group, who asked to remain anonymous, told AFP.
On Saturday, Israeli air strikes killed nine Islamic Jihad militants, while retaliatory rocket fire killed one Israeli, one of the bloodiest exchanges between the two sides since since a tacit ceasefire was agreed between Gaza Palestinian militants and Israel in late August.
The first Israeli attack early Saturday afternoon killed five members of the Al-Quds Brigades, Islamic Jihad's armed wing, said Adham Abu Selmiya, spokesman for Gaza's emergency services.
Another three militants were critically wounded, he added.
As tit-for-tat fighting continued into the night, Israeli aircraft struck more targets in Gaza, killing four more militants and wounding at least two, witnesses and Palestinian officials said.
At least two of the militants were killed as they tried to fire a Grad rocket into Israel, an Al-Quds spokesman said.
The Israeli military said of the first raid that the air force had fired on a "group of terrorists preparing to fire long-range rockets" and that the attack had "prevented the attempted firing."
The other strikes were aimed at similar targets, it said.
Reprisal attacks began after sunset Saturday, and police said that by mid-evening 21 rockets had been fired from Gaza into southern Israel.
One Israeli, wounded by shrapnel in Ashkelon, later died in hospital, Israeli medical officials and police said. Four others were wounded, two of them seriously.
The city of Ashdod, the nearby town of Gan Yavneh and the city of Ashkelon, to the south, were all hit, police said.
One rocket was fired towards the city of Beersheeva in the Negev desert but appeared to have struck open ground, police said.
A statement released by Israeli Prime Minister Benjamin Netanyahu's office said he had phoned the mayors of Ashkelon, Ashdod and Beersheeva and told them that the military's "tough response will be even tougher if necessary."
"The recent escalations are very worrying, said Richard Miron, a spokesman for UN Middle East envoy Robert Serry.
"It's vital to de-escalate now, without any delay. We strongly appeal for calm and an end to violence and bloodshed," he said in a statement.
A statement from the Al-Quds Brigades claimed responsibility for the fire and it posted a video on its website that it said showed the launching of five of the rockets.