Israel and the Hamas militant group reached a cease-fire agreement Wednesday to end the fiercest round of fighting in nearly four years, promising to halt attacks on each other and ease an Israeli blockade constricting the Gaza Strip.
The deal was brokered by the new Islamist government of Egypt, solidifying its role as a leader in the quickly shifting Middle East. Under the agreement, Egypt will play a key role in maintaining the peace.
Egypt's foreign minister, Mohammed Kamel Amr, announced the deal, capping days of intense efforts that drew the world's top diplomats into the fray. Secretary of State Hillary Clinton stood next to Amr as he announced the breakthrough at a news conference in Cairo.
The agreement will "improve conditions for the people of Gaza and provide security for the people of Israel," Clinton said. In Israel, Prime Minister Benjamin Netanyahu's office said he agreed to the cease-fire after consulting with President Barack Obama.
In Washington, Obama hailed the agreement. "The president expressed his appreciation for the Prime Minister's efforts to work with the new Egyptian government to achieve a sustainable ceasefire and a more durable solution to this problem," a White House statement said.
The White House said the United States will use the opportunity offered by the cease-fire to intensify efforts to help Israel address its security needs, especially the smuggling of weapons and explosives into Gaza.
Obama also said he would seek more money for the Iron Dome defense system that has protected Israel from rocket attacks.
U.S. stocks rose on word of the truce . Brent crude fell to a session low of $109.55 on the news, but price was still not below Tuesday's low of $109.01. (Read More: Pro: Time to Sell Oil.)
Israel launched the fierce Israeli offensive in Gaza last week to stop months of intensifying rocket attacks. Even after the deal was announced, an air-raid siren signaled a rocket attack in southern Israel, while an airstrike could be heard in Gaza.
Minutes before the deal took effect at 9 p.m. local time. (2 p.m. EST) there was a last spasm of Palestinian rocket attacks and Israeli airstrikes, including one that killed a man minutes before the deadline. After 9 p.m., the attacks ceased. Israel launched well over 1,500 airstrikes and other attacks on targets in Gaza since fighting started Nov. 14, while more than 1,000 rockets pounded Israel. In all, 161 Palestinians, including dozens of civilians, were killed, while five Israelis died.
In the last-minute burst of fire, Palestinian militants fired five rockets into the southern Israeli city of Beersheba. One rocket hit a house inside the city, police said. No injuries were reported.
Earlier Wednesday, a bus was bombed in Tel Aviv, injuring 21 people in the first such attack there since 2006. Israel and the United States branded it a terrorist attack, and a White House statement reaffirmed Washington's "unshakeable commitment to Israel's security."
According to a copy of the agreement obtained by The Associated Press, Israel and Hamas agreed to an immediate halt in the violence. Israel will end its policy of assassinating top Hamas officials, while Hamas promised to halt all rocket fire by the many militant groups operating in the Gaza Strip.
After a brief cooling off period, Israel pledged to ease its blockade of Gaza, though there were no firm assurances on how that will be done. Israel has maintained the blockade since Hamas seized power of Gaza in 2007, though it has gradually lifted many of the restrictions.
The deal was vague on what limits Israel would lift, and whether Gaza's southern passenger terminal on the Egyptian border would be expanded to allow cargo to pass through as well. The deal was also unclear about a key Israeli demand for an end to arms smuggling into Gaza in tunnels underneath the border with Egypt.
Under the agreement, Egypt will play a key role. It said "Egypt shall receive assurances from each party" that they are committed to the deal.
"Each party shall commit itself not to perform any acts that would break this understanding," it adds. "In case of any observations, Egypt — as the sponsor of this understanding — shall be informed to follow up."
The deal marked a key victory for Egypt's new Islamist government, which is caught in a balancing act between its allegiance to Hamas and its need to maintain good relations with Israel and the U.S. Hamas is an offshoot of Egypt's ruling Muslim Brotherhood.