Gaza's Popular Resistance Committees on Monday agreed to halt rocket fire on Israel and abide by an Egyptian-brokered truce after four days of deadly clashes.
At a news conference in Gaza City, the PRC said its militants would respect a "temporary" ceasefire which was announced late on Sunday by Gaza's Hamas rulers.
"We have temporarily stopped firing rockets at Israel according to the national consensus," said a masked spokesman for the group, which was blamed by Israel for a series of bloody attacks near Eilat last week that killed eight Israelis and sparked the latest round of bloodshed.
But the PRC, whose leader was killed in a series of Israeli air strikes late last week, said talk of a more permanent truce was "out of the question. We have an open account with the enemy until it leaves Palestinian soil."
The announcement came just hours after a senior Hamas official told AFP that the factions had hammered out a truce agreement in talks with Egyptian officials, which would be contingent on Israel stopping its air strikes on Gaza.
"We have reached an informal agreement to establish a ceasefire from tonight on condition that Israel halts its attacks," he told AFP.
In a formal announcement on Monday, Hamas spokesman Taher al-Nunu thanked both Egypt and UN envoy Robert Serry for helping "to stop the aggression against Gaza."
"An agreement about a mutual truce was reached and we affirm that the Israeli occupation must commit to this truce because the factions told the government they are committed to it for as long as the occupation is," he said.
On Sunday night, the Hamas-run security forces were "instructed to stop the shooting" against Israel, with police checking cars in the border area, and checkpoints set up at the entrance to every town in Gaza.
Israel police said seven rockets were fired from Gaza between midnight and 8:00 am (2100-0500 GMT), but nothing after that.
Israel's 15-member security cabinet was reportedly called to an emergency meeting at 3:00 am (0000 GMT), army radio said, at which the military's top brass presented various options for stopping the rocket fire.
But after an hour of discussion, ministers decided against a ground operation for fear it "could trigger mass demonstrations in Egypt which could destabilise the regime in Cairo" and also harm Israeli interests in September when the Palestinian are planning to seek UN membership, the radio said.
Efforts to end the fighting in and around Gaza came as Israel sought to head off a diplomatic crisis with Egypt sparked by Thursday's attacks near Eilat, with Cairo saying five policemen had been killed by Israeli fire during the hunt for gunmen along the border.
Two days later, Egypt's state television said Cairo was going to recall its envoy from Israel in protest.
Israeli Defence Minister Ehud Barak expressed "regret" over the deaths and promised an investigation, but Egypt said it wasn't enough, although it made no move to confirm reports it would recall its envoy.
The looming spectre of a crisis with Egypt played a concrete role in bringing about an end to the Gaza confrontations, Israeli press reports said.
"As early as Saturday morning, in an effort to avoid worsening relations with Egypt following Thursday's terror attack, the government ordered the IDF to greatly reduce its attacks on terrorist targets in the Gaza Strip," Haaretz said.
"We must not lose Egypt because of one terror attack," a senior defence official told the paper. "If the attack near Eilat harms our relations with Egypt, that will be a great victory for the terror organisations."
Tensions in and around Gaza kicked off after the Negev desert shooting attacks with Israel launching a wave of retaliatory air strikes against the Popular Resistance Committees, killing its leader and several other of its senior militants.
In the following days, Israeli air strikes killed 15 Palestinians, nine of them militants, while more than 50 people were wounded.
Over the same period, militants fired more than 100 rockets and mortars at Israeli towns and cities in the south, killing one man and injuring more than 20, one critically.
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