The ceasefire came into force at 10.30pm after three days of shelling from both sides, a source revealed. Islamic Jihad took the fight with Israel into a third day, firing rockets at the outskirts of Jerusalem.
There were no casualties but the attack signalled a new strike point from Gaza as Israel continued hitting targets.
Islamic Jihad had targeted Jerusalem in retaliation for Israel killing Khaled Mansour in Rafah, its commander in southern Gaza.
The militants had claimed: “The blood of the martyrs will not be wasted.”
Some 30 Palestinians, at least a third of them civilians including six children, were killed in Gaza fighting on Friday.
Rocket salvoes have paralysed much of southern Israel and sent residents fleeing to shelters in cities such as Tel Aviv.
Casualties on the Israeli side have been prevented by the Iron Dome anti-missile system, which an army spokesman said had a 97 per cent success rate in shooting down rockets.
The flare-up has worried world powers and prompted the mediation by Egypt.
But it has been contained by the fact that Hamas, the governing Islamist group in the impoverished and blockaded Gaza Strip since 2007, has held fire. Palestinians dazed by another surge of bloodshed –
after outbreaks of war in 2008-09, 2012, 2014 and last year – yesterday picked through the ruins of their homes.
Israel claimed it would stop shooting if Islamic Jihad did.
The booms of rocket interceptions over towns some two miles west of Jerusalem could be heard in the city during a Jewish fast in a commemoration of ancient temples.
Israel launched Friday’s strikes in what it described as the pre-emption of an Islamic Jihad attack meant to avenge the arrest of group leader Bassem Saadi in theWest Bank.
Israeli justice minister Gideon Sa’ar said the operation was in response to hundreds of rockets fired by Palestinians.
He added: “Islamic Jihad wants to protract this operation, it will regret it.”