Egypt has announced a ceasefire agreement to end a week of fighting between Israel and Hamas militants in the Gaza Strip.
Foreign Minister Mohammed Kamel Amr said the truce would take effect at 9 p.m. local time (2 p.m. EDT.) He made the announcement alongside visiting U.S. Secretary of State Hillary Rodham Clinton.
In Jerusalem, Israeli Prime Minister Benjamin Netanyahu confirmed the deal, saying he had agreed after consulting with President Barack Obama.
This development comes after U.S. Secretary of State Hillary Clinton on Wednesday pursued a Gaza truce, with Israel and Hamas still at odds over key terms, as Israeli air strikes shook the enclave and a bomb exploded on a Tel Aviv bus.
US President Barack Obama praised Israeli Prime Minister Benjamin Netanyahu on Wednesday for agreeing to support an Egyptian plan for a ceasefire in the Gaza conflict, the White House said.
"The president commended the prime minister for agreeing to the Egyptian ceasefire proposal, which the president recommended the prime minster do, while reiterating that Israel maintains the right to defend itself," it said.
After talks in Ramallah with Palestinian President Mahmoud Abbas, Ms. Clinton held a second meeting with Israeli Prime Minister Benjamin Netanyahu before travelling to Egypt for discussions with President Mohamed Mursi, whose country is the main broker in efforts to end eight days of fighting.
UN Secretary General Ban Ki-moon also met with Mr. Mursi, after meeting Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas.
An Israeli political source said earlier the differences that were holding up a deal centred on a Hamas demand to lift the Gaza blockade completely and the kind of activity that would be allowed along the frontier, where Israeli troops often fire into the enclave to keep Palestinians away from an area near a border fence.
Hamas official Ezzat al-Rishq said the main stumbling block was "the temporary time-frame for a ceasefire that the Israelis want us to agree to".
The London-based Al Hayat newspaper, citing sources in Hamas and Islamic Jihad, said Israel wanted a 90-day period to determine "good intentions" before discussing Palestinian demands, a position the report said the groups have rejected.
Mr. Rishq said a short-term truce, whose proposed duration he did not disclose, "would only buy (Israel) time" until a general election in January and "we would have accomplished nothing in the way of a long-term truce".
Hamas sources said the group was also demanding control over Gaza's Rafah borders with Egypt, so that Palestinians could cross easily, and Israeli guarantees to stop assassinating Hamas leaders.
Israel, one of the Hamas sources said, wanted a commitment from the group to stop smuggling through tunnels that run into Gaza under the Egyptian border. The tunnel network is a conduit for weapons and commercial goods.
News of the Tel Aviv bus bombing, the first serious blast in Israel's commercial capital since 2006, emerged just after Ms. Clinton and Mr. Netanyahu ended their meeting. A spokesman for Mr. Netanyahu declined to give details on their discussions, which followed talks on Tuesday.
Ms. Clinton, who flew to the region from an Asian summit, said in her public remarks after Tuesday's meeting with Mr. Netanyahu that it was "essential to de-escalate the situation".
"The rocket attacks from terrorist organisations inside Gaza on Israeli cities and towns must end and a broader calm restored," she said.
Ms. Clinton earlier assured Mr. Netanyahu of "rock-solid" U.S. support for Israel's security, and praised Egyptian President Mohamed Morsi's "personal leadership and Egypt's efforts thus far" to end the Gaza conflict and promote regional stability.
"As a regional leader and neighbour, Egypt has the opportunity and responsibility to continue playing a crucial and constructive role in this process. I will carry this message to Cairo tomorrow (Wednesday)," she said.
Mr. Netanyahu told Ms. Clinton he wanted a "long-term" solution. Failing that, Mr. Netanyahu made clear, that he stood ready to step up the military campaign to silence Hamas' rockets.
"A band-aid solution will only cause another round of violence," said Ofir Gendelman, a Netanyahu spokesman.
While diplomatic efforts continued, Israel struck more than 100 targets in Gaza overnight, killing a Hamas gunman and destroying a cluster of Hamas government buildings.
Palestinians militants fired 31 rockets at Israel, causing no casualties, and Israel's Iron Dome interceptor system shot down 14 of them, police said.
Israel has carried out more than 1,500 strikes since the offensive began. Medical officials in Gaza said 139 Palestinians, most of them civilians, including 34 children, have been killed. Nearly 1,400 rockets have been fired into Israel, killing four civilians and a soldier, the Israeli military said.
In the West Bank city of Ramallah, Ms. Clinton held talks with Palestinian President Abbas, whose bid to upgrade the Palestinians' status at the United Nations, in the absence of peace negotiations with Israel, is opposed by Washington.
"Once the Israelis accept to stop their bombardments, their assassinations, there will be a comprehensive ceasefire sustained from all parties," Mr. Erekat said.
A Palestinian official with knowledge of Cairo's mediation told Reuters that Egyptian intelligence officials would hold further discussions on Wednesday with leaders of Hamas and the Islamic Jihad group.
"There may be a response from Israel that Egyptian mediators want to present to Hamas and Islamic Jihad leaders," the official said. "Let's be hopeful it would be something Palestinian factions can accept."
Like most Western powers, Washington shuns Hamas as an obstacle to peace and has blamed it for the Gaza conflagration. A UN Security Council statement condemning the conflict was blocked on Tuesday by the United States, which complained that it "failed to address the root cause," the Palestinian rockets.
Hamas for its part is exploring the opportunities that last year's Arab Spring has given it to enjoy favour from new Islamist governments, and from Sunni Gulf powers keen to woo it away from Shia Iran.
It may count on some sympathy from Mr. Morsi, although Egypt's first freely elected leader, whose Muslim Brotherhood inspired Hamas' founders, has been careful to stick by the 1979 peace deal with Israel struck by Cairo's former military rulers.
Along the Gaza border, Israeli tanks, artillery and infantry remained poised for a possible ground offensive in the densely populated enclave of 1.7 million Palestinians.
But an invasion, likely to entail heavy casualties, would be a major political risk for Mr. Netanyahu, who is currently favoured to win the upcoming Israeli election. More than 1,400 Palestinians were killed in Israel's three-week war in the Gaza Strip in 2008-9, prompting international criticism of Israel.
In Tel Aviv, targeted by rockets from Gaza that either did not hit the city or were shot down by Israel's Iron Dome interceptor system, 15 people were wounded when a commuter bus was blown up near the Defence Ministry and military headquarters.
Israel and the United States branded it a terrorist attack, and a White House statement reaffirmed Washington's "unshakeable commitment to Israel's security".
The explosion, which police said was caused by a bomb placed on the vehicle, touched off celebratory gunfire from militants in Gaza and threatened to complicate truce efforts.
Israel's best-selling Yedioth Ahronoth newspaper said an emerging outline of a ceasefire agreement called for Egypt to announce a 72-hour ceasefire followed by further talks on long-term understandings.
Under the proposed document, which the newspaper said neither party would be required to sign, Israel would hold its fire, end attacks against top militants and promise to examine ways to ease its blockade of Gaza, controlled by Hamas Islamists who do not recognise the Jewish state's right to exist.
Hamas, the report said, would pledge not to strike any Israeli target and ensure other Palestinian factions in the Gaza Strip also stop their attacks.
While diplomatic efforts continued, Israel struck more than 100 targets in Gaza, including a cluster of Hamas government buildings, in attacks that medical officials said killed 10 people, among them a 2-year-old boy.
Palestinians militants fired more than 30 rockets at Israel, causing no casualties, and the Iron Dome interceptor system shot down 14 of them, police said.
Israel has carried out more than 1,500 strikes since the offensive began with the killing of a top Hamas commander and with declared aim of deterring Hamas from launching rocket attacks that have long disrupted life in its southern towns.
Medical officials in Gaza said 144 Palestinians, more than half of them civilians, including 36 children, have been killed in Israel's offensive. Nearly 1,400 rockets have been fired into Israel, killing four civilians and a soldier, the military said.
With files from AP and AFP
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