Israel and Hamas agree to Gaza ceasefire

The announcement came after US Secretary of State Hillary Clinton flew to Cairo to save a deal that had been drafted by Egypt.

The truce accord calls on Israel to "stop all hostilities... in the land, sea and air including incursions and targeting of individuals''.

It also urges the Palestinian factions to end "rocket attacks and all attacks along the border.''

The deal will be in two stages – the first is the immediate end to firing while the second involves a more detailed agreement involving possible loosening by Israel of its controls on Gaza’s land and sea borders.

The deal almost faltered due to divisions within the Israeli government.

Some members of the Israeli government did not want to agree to a ceasefire while Hamas continued to fire rockets into Israel.

Hamas chief Khaled Meshaal said that Israel had "failed in all its goals'' after the Gaza truce deal came into effect, while thanking Iran for its support during the conflict.

"After eight days, God stayed their hand from the people of Gaza, and they were compelled to submit to the conditions of the resistance,'' Mr Meshaal said.

"Israel has failed in all its goals,'' he told reporters in a Cairo hotel.

Mr Meshaal also thanked ceasefire mediator Egypt, as well as Iran, which he said "had a role in arming'' Hamas during the conflict.

Gazans took to the streets to celebrate the start of a truce deal with Israel, firing into the air, honking car horns and chanting victory slogans.

Heavy celebratory gunfire could be heard throughout the Gaza Strip, and residents also released fireworks into the night sky, where Israeli drones could still be buzzing heard overhead.

"The resistance has triumphed,'' some shouted, alongside chants of  "Allahu akbar (God is great).''

As part of the deal, Israel and the United States have agreed to work together to prevent the smuggling of weapons from Iran to militant groups in the Gaza Strip, Prime Minister Benjamin Netanyahu said.

"Israel cannot sit idly by as its enemies strengthen themselves with weapons of terror so I agreed with President (Barack) Obama that we will work together - Israel and the United States - against the smuggling of weapons to terror organisations, most of which comes from Iran,'' he said in a televised address.

Mr Netanyahu said that Israel's Operation Pillar of Defence began after increasing attacks by Gaza militants.

"I said we'd extract high price from terror organisations. The terror organisations thought we'd refrain from strong action. They were wrong,'' he said.

The announcement of the peace deal came only hours after a bomb exploded on a bus in Tel Aviv, injuring 21 people.

Hamas claimed responsibility for that bombing.

While there was an escalation in attacks on Hamas-controlled Gaza after that bombing, Mrs Clinton is believed to have urged Mr Netanyahu to agree to the ceasefire.

The recent fighting flared between Hamas and Israel after Israel assassinated the military commander of Hamas, Ahmed Jabari.

That killing followed a spate of rockets fired from Gaza into Israel – 124 over three days.