Israel, Hamas Agree To Ceasefire: Sources

First word of the truce came from a Palestinian official who has knowledge of the negotiations in Cairo, where U.S. Secretary of State Hillary Clinton was also pursuing peace efforts.

Asked whether a ceasefire deal had been reached, an Egyptian official in Cairo said: "Yes, and Egypt will announce it."

Egyptian state TV had earlier said a news conference would be broadcast from President Mohamed Mursi's palace shortly.

Israeli sources said Israel had agreed to a truce, but would not lift its blockade of the Palestinian territory, which is run by the Islamist Hamas movement.

All the sources declined to be named or to give further details of the arrangements hammered out in Cairo.

More than 140 Palestinians and five Israelis have been killed in the fighting that began last Wednesday.

The ceasefire, if confirmed, was forged despite a bus bomb explosion that wounded 15 Israelis in Tel Aviv earlier in the day and despite more Israeli air strikes on the Gaza Strip.

After talks in Ramallah with Palestinian President Mahmoud Abbas, Clinton held a second meeting with Israeli Prime Minister Benjamin Netanyahu before travelling to Egypt for discussions with Mursi, whose country has led mediation efforts.

In Tel Aviv, targeted by rockets from Gaza that either did not hit the city or were shot down by Israel's Iron Dome interceptor system, 15 people were wounded when a bus was blown up near the Defence Ministry and military headquarters.