After a meeting of his security cabinet, Prime Minister Ehud Olmert said he was calling an immediate end to offensive operations but added that troops would stay in Gaza for the time-being with orders to return fire if attacked.
"At two o'clock in the morning (0000 GMT) we will stop fire but we will continue to be deployed in Gaza and its surroundings," Olmert said in a speech after the vote. "We have reached all the goals of the war, and beyond," he added.
"If our enemies decide to strike and want to carry on then the Israeli army will regard itself as free to respond with force." Hamas said that Israel's declaration of a unilateral ceasefire in the Gaza Strip does not put an end to the group's "resistance".
"A unilateral ceasefire does not mean ending the (Israeli) aggression and ending the siege. These constitute acts of war and so this will not mean an end to resistance," Hamas spokesman Fawzi Barhoum told Reuters. In the hours before the security cabinet meeting, Israel kept lobbing shells into the densely populated urban area, while to the north in Beit Lahiya a UN-run school was set ablaze by bombs.
Two brothers, aged five and seven, were killed and another dozen people wounded in the attack, in which burning embers trailing smoke rained down on a school where some 1,600 people were sheltering, setting parts of it alight. Ban called the fourth such attack on a UN-run school during the war as "outrageous" and demanded a thorough investigation.
During the course of the war, schools, hospitals, UN compounds and thousands of homes all came under attack with the Palestinian Authority putting the cost of damage to infrastructure to infrastructure alone is 476 million dollars. At least 1,206 Palestinians, including 410 children, have been killed since the start of Israel's deadliest-ever assault on the territory on December 27, according to Gaza medics, who said another 5,300 people have been wounded.
Those slain in the war also include 109 women, 113 elderly people, 14 paramedics, and four journalists, according to Dr. Muawiya Hassanein, the head of Gaza emergency services. Since the start of the operation 10 Israeli soldiers and three civilians have been killed in combat or in rocket strikes. The army says more than 700 rockets and mortar rounds have been fired into Israel during that period.
One of the main aims of the offensive has been to put a halt to rocket and mortar attacks but a further 23 missiles were fired from Gaza on Saturday, including seven long-range missiles. The army said that it had carried out 70 aerial attacks against weapons smuggling tunnels along Gaza's border with Egypt, Hamas's rear supply route.
The Islamists, who seized power in Gaza by driving out forces loyal to moderate Palestinian Authority president Mahmud Abbas, continued to strike a defiant note in the build-up to ceasefire announcement.
"This unilateral ceasefire does not foresee a withdrawal" by the Israeli army, Osama Hemdan, the movement's Lebanon representative, told AFP. "As long as it remains in Gaza, resistance and confrontation will continue." The stop to the violence came after the Jewish state won pledges from Washington and Cairo to help prevent arms smuggling into Gaza, the lesser half of the Palestinians' promised future state.
Although Egypt has not given any details about what assurances it has given Israel, Secretary of State Condoleezza Rice signed a pledge on Friday promising "enhanced US security and intelligence cooperation with regional governments on actions to prevent weapons and explosive flows to Gaza."