As fighting tapered off late on Saturday night, streets in Gaza that had largely been deserted filled with Palestinians. Some people cheered and honked car horns while others headed to the homes of people killed in the fighting to show their respect.
"In light of the agreement of the Palestinian and the Israeli side, Egypt announces a ceasefire between the Palestinian and the Israeli sides has been reached," a text of the agreement seen by Reuters read.
"The two sides will abide by the ceasefire which will include an end to targeting civilians, house demolition, an end to targeting individuals immediately when the ceasefire goes into effect," it said.
Israel's national security adviser thanked Egyptian President Abdel Fattah al-Sisi for Cairo's efforts, a statement from Prime Minister Benjamin Netanyahu said.
"Quiet will be met with quiet and if Israel will be attacked or threatened, it shall continue to do what it must in order to defend itself," the statement said.
Islamic Jihad also confirmed the agreement.
"We declare our acceptance of the Egyptian announcement and we will abide by it as long as the occupation (Israel) abides by it," the group's spokesman, Dawoud Shehab, said.
Even as the truce was being finalised, the two sides kept up firing, with air raid sirens sounding as far as Tel Aviv's suburbs and Israel's military announcing it had hit Islamic Jihad targets in response to rocket fire.
Though happy about news of the truce, some Gaza residents, weary of repeated flare-ups, feared that another round of fighting would erupt before long.
"We want the truce to be based on principles, not like in the past when after a calm (truce) people died," said resident Munir Marouf, 43.
Israel launched the latest round of airstrikes in the early hours of Tuesday, announcing it was targeting Islamic Jihad commanders who had planned attacks in Israel.
In response, the Iranian-backed group fired more than 1000 rockets, sending Israelis fleeing into bomb shelters.
During the five days of the campaign, Israel killed six senior Islamic Jihad commanders and destroyed a number of military installations.
At least 10 civilians, including women and children, were also killed in Gaza during the fighting, and two people - an Israeli woman and a Palestinian labourer - were killed by Palestinian rocket fire in Israel.
Islamic Jihad spurns co-existence with Israel and preaches its destruction. Top ministers of Israel's religious nationalist government rule out any state sought by Palestinians in territories captured by Israel in the 1967 Middle East war.
