Israel and Islamic Jihad on Sunday agreed on an Egyptian-brokered truce hoped to end three days of intense conflict that has left at least 43 Palestinians dead, including 15 children.
The deal that came into effect at 11:30 pm local time on Sunday, raised hopes of an imminent cessation of the worst fighting in Gaza since an 11-day war last year devastated the impoverished Palestinian coastal territory.
But minutes before the truce was due to come into force, the Israeli army said it was "striking terror targets" inside Gaza, while multiple air raid sirens warning of militant rocket attacks sounded in southern Israel.
Israeli Prime Minister Yair Lapid's office thanked "Egypt for its efforts" and confirmed the truce would come into effect, but warned it that "if the ceasefire is violated, the State of Israel maintains the right to respond strongly."
Islamic Jihad member Mohammad al-Hindi had earlier confirmed that it had accepted the truce, but the group added in a statement that it also "reserves the right to respond" to any aggression.
Since Friday, Israel has carried out heavy aerial and artillery bombardment of Islamic Jihad positions in Gaza, with the Islamic Jihad firing hundreds of rockets in retaliation. Buildings in Gaza have been reduced to rubble, while Israelis have been forced to shelter from a barrage of rockets.
In addition to the 43 people killed in Gaza, including 15 children, more than 300 people have been wounded in the Palestinian enclave, which is run by Hamas.
Three people in Israel have been wounded by shrapnel over the same period, while 31 others have been lightly hurt, emergency services said on Sunday. Islamic Jihad's Hindi said the ceasefire deal "contains Egypt's commitment to work towards the release of two prisoners".
The pair were named as Bassem al-Saadi, a senior figure in the group's political wing who was recently arrested in the occupied West Bank, and Khalil Awawdeh, a militant also in Israeli detention. Palestinian president Mahmud Abbas also welcomed the truce in a statement from his office, thanking the "tireless efforts" made by Egypt. - 'Terrifying' - Nour Abu Sultan, who lives in the west of Gaza, said earlier Sunday that she was "awaiting the declaration of the ceasefire on tenterhooks". "We haven't slept for days (due to) heat and shelling and rockets, the sound of aircraft hovering above us... is terrifying," the 29-year-old said.
'Dalia Harel, a resident in the Israeli town of Sderot close to the Gaza border, said she was "disappointed" at news of a truce despite her five children being "traumatized".
"We're tired of having a military operation every year," she said. "We need our military and political leaders to get it over with once and for all... we're not for war, but we can't go on like this." An AFP photographer saw two rockets being intercepted in the center of Israel's commercial capital Tel Aviv on Sunday evening.
Two Islamic Jihad rockets earlier in the day had targeted Jerusalem, but they were shot down by the Israeli army. Islamic Jihad is aligned with Hamas but often acts independently. Hamas has fought four wars with Israel since seizing control of Gaza in 2007, including the conflict last May. The Israeli army has said the entire "senior leadership of the military wing of the Islamic Jihad in Gaza has been neutralized".
Muhammad Abu Salmiya, director general of the Shifa hospital in Gaza City, said medics were treating wounded people in a "very bad condition", warning of dire shortages of drugs and fuel to run power generators. "Every minute we receive injured people," he said earlier Sunday.
The army said it had struck over a hundred Islamic Jihad positions, with the Islamic Jihad firing hundreds of rockets and mortars, some of them falling short inside Gaza. Israel said it had "irrefutable" evidence that a stray rocket fired by Islamic Jihad was responsible for the deaths of several children in Gaza's northern Jabalia area on Saturday. An AFP photographer saw six dead bodies at the hospital there, including three minors.
"We came running to the place and found body parts lying on the ground... they were torn-apart children," said Muhammad Abu Sadaa, describing the devastation in Jabalia.
Amid the high tensions, Jews in Israel-annexed east Jerusalem marked the Tisha Be'av fasting day Sunday at the Al-Aqsa mosque compound, known in Judaism as the Temple Mount.
Some Palestinians shouted "God is greatest" in response, and an AFP photographer was briefly detained by Israeli police, but commemorations passed without major incident. Israel has said it was necessary to launch a "pre-emptive" operation Friday against Islamic Jihad, which it said was planning an imminent attack.
The army has killed senior leaders of Islamic Jihad in Gaza, including Taysir al-Jabari in Gaza City and Khaled Mansour in Rafah in the south.