Deal comes after four Palestinians and an Israeli soldier were killed in latest violence near Gaza-Israel fence.
More than 140 Palestinians have been killed by Israeli forces since protests on March 30 [File: Ibraheem Abu Mustafa/Reuters]
The deal, brokered by Egyptian and United Nations officials, was designed to restore calm and end the Israeli onslaught on Hamas positions and other violence that resulted in the deaths of four Palestinians and one Israeli soldier on Friday.
Hamas spokesman Fawzi Barhoum announced the deal early on Saturday morning, saying that it had been active from midnight local time on Friday.
"We reached [an agreement] to return to the previous state of calm between the [Israeli] occupation and the Palestinian factions," Barhoum said.
Israel confirmed the agreement later on Saturday, with the army said in a separate statement that communities near Gaza could return to normal activity, according to the Israeli daily Haaretz.
"At the end of an assessment by the southern command this morning it was decided to maintain a full civilian routine in the communities close to the Gaza Strip," Haaretz quoted the statement as saying.
Israeli soldiers fired live bullets and tear gas canisters towards Palestinian protesters gathered along the fence with Israel, killing 27-year-old Mohammad Sharif Badwan and wounding 120 others, according to health officials in Gaza.
Hamas also said three of its members were killed earlier in the day after Israel launched large-scale attacks in the southern part of the enclave. Sixty Hamas targets were hit by Israeli forces on Friday night.
Israeli forces said the attacks came after one of its soldiers, Staff Sergeant Aviv Levy, 20, was hit by Palestinian gunmen. They later announced the soldier had succumbed to his wounds, marking the first Israeli military fatality in the area since the 2014 Gaza war.
More than two million Palestinians are packed into the Gaza Strip, a territory the size of the US city of Detroit - about 360sq km - which has been described as "the world's largest open-air prison".
Israel withdrew its troops and settlers from Gaza in 2005 but, citing security concerns, maintains tight control of its land and sea borders, which has reduced its economy to a state of collapse. Egypt also restricts movement in and out of Gaza on its border.
While it appeared that relative calm had returned to the area on Saturday, Phyllis Bennis, a programme director at the US-based Institute for Policy Studies, said it was unlikely that any ceasefire agreement would hold.
"It is important that they use the word calm [in the announcement] and not the word peace," Bennis told Al Jazeera.
"There has been no calm in Gaza for many, many decades," she said. "If there is a ceasefire that holds briefly it will not hold for very long I'm afraid."
Her view was echoed by Usama Antar, a political analyst in Gaza City.
"I don’t think this ceasefire will last for a long time. It's very fragile," he told Al Jazeera.