Israeli Prime Minister Ehud Olmert has announced a unilateral ceasefire in Gaza after a security cabinet meeting this evening.
Mr Olmert said that Israel's offensive in Gaza had achieved all its objectives.
He told a news conference after the security cabinet voted to end operations, that some goals had been exceeded, that Hamas had been hit hard and its ability to fire rockets into Israel had been severely limited.
Israel will cease all operations in Gaza at 2am.
Mr Olmert said ground troops would remain in place and hit back if Hamas continued its attacks on Israel.
Hamas responded by saying that Israel's declaration of a unilateral ceasefire in Gaza does not put an end to the group's 'resistance'.
Israeli emergency services have reported that four rockets have landed in the town of Beersheba.
UN Secretary-General Ban Ki-moon said he was relieved about an Israeli ceasefire the Gaza and urged Israel to withdraw all of its troops as soon as possible.
He said that Hamas militants also needed to do their part to bring an end to the violence by halting their rocket attacks against southern Israel.
Mr Ban said that humanitarian access for the people of the Gaza Strip was the top priority and the United Nations was ready to act immediately.
Mr Olmert said the ceasefire plan responded to an appeal from Egyptian President Hosni Mubarak, who has been at the spearhead of international diplomatic efforts to end the conflict.
Despite the lack of any clear deal at this stage, Mr Mubarak has invited European leaders to a short-notice summit tomorrow to try to come up with ways to bolster the truce in Gaza and to ease the plight of the civilian population.
Offensive ending
Earlier, Hamas leaders in exile vowed to fight on, but many of the 1.5 million Palestinians enduring incessant bombardment seemed desperate for their ordeal to end.
Israel launched air strikes on Gaza on 27 December and ground troops pushed in a week later.
Without an accord with Hamas, diplomats say they fear Israel will let only a trickle of goods into Gaza, hampering reconstruction and creating more hardship for its people.
‘There is no agreement with Hamas,’ an Israeli official said, adding that Israel would reserve the right to act if Hamas continued firing or launched rockets across the border.
A Hamas official in Beirut said earlier that they would keep fighting until Israel met their demands, mainly for an end to a crippling economic blockade.
Israeli forces attacked 50 targets in the coastal enclave overnight. Tank fire killed two boys sheltering at a United Nations school, a UN official said.
‘These two little boys are as innocent, indisputably, as they are dead,’ John Ging, head of the UN Relief and Works Agency (UNRWA) in Gaza, said after the school was hit.
About 45,000 Gaza residents are sheltering in UN-run schools in Gaza.
Martin welcomes ceasefire announcement
Minister for Foreign Affairs Micheál Martin welcomed the ceasefire announcement.
Mr Martin said it was imperative that the ceasefire be maintained and humanitarian assistance was urgently provided in Gaza.
He called on Hamas and other militant groups to cease the firing of rockets into southern Israel.
Fine Gael spokesman on foreign affairs also welcomed the move.
Billy Timmins said it was important that the UN began a full investigation into all aspects of the conflict in Gaza.
