secretary of state Hillary Clinton. In Jerusalem, Israeli PM Benjamin Netanyahu confirmed the deal, saying he had agreed after consulting with US President Barack Obama.
The deal is to end a week of fighting that has killed more than 140 Palestinians and five Israelis.
A deal to end a deadly week-long conflict between Hamas and Israel in and around the Gaza Strip was agreed on Wednesday, a senior Hamas official told AFP.
In details of the agreement obtained exclusively by The Associated Press, a Palestinian official said Israel would cease all military activity against the Hamas-ruled Gaza Strip and Palestinian militants would cease rocket attacks into Israel.
After 24 hours of quiet, Gaza's border crossings with Israel would be opened further to allow freer movement of goods and people.
Egypt would be the guarantor of the deal, according to the official, who spoke on condition of anonymity because he was not authorised to speak to the media.
Israel's offensive, launched on November 14 with the targeted killing of a Hamas military chief, claimed the lives of 26 more Palestinians Tuesday and saw an air strike on an eight storey building housing AFP's Gaza City offices, causing no injuries.
Diplomatic efforts to arrive at a truce have involved US Secretary of State Hillary Clinton, UN chief Ban Ki-moon and Egyptian President Mohamed Morsi.
Tel Aviv blast
Earlier in the day, a bomb exploded aboard an Israeli bus near the nation's military headquarters in Tel Aviv, wounding 27 people, delivering a major blow to diplomatic efforts to forge a truce. Thousands of Palestinians fled their homes in Gaza fearing Israeli airstrikes following the blast in the bus.
The blast, which left the bus charred and its windows blown out, was the first bombing in Tel Aviv since 2006. It appeared aimed at sparking Israeli fears of a return to the violence of the Palestinian uprising last decade, which killed more than 1,000 Israelis in bombings and left more than 5,000 Palestinians dead as well.
While Hamas did not take responsibility for the attack, it praised the bombing.
"We consider it a natural response to the occupation crimes and the ongoing massacres against civilians in the Gaza Strip," Hamas spokesman Fawzi Barhoum said.