The United States and United Nations are announcing that Israel and Hamas have agreed to a humanitarian cease-fire to start at 8 am on Friday morning, for 72 hours. Sources in Israel's Security Cabinet confirmed the report for Ynet.
According to the deal, IDF forces will remain in Gaza, marking a win for Israel which has been adamant in its demand it continue to destroy Gaza tunnels, regardless of whether such a deal is reached.
In a joint statement, the US and UN said they had gotten assurances that all parties to the conflict had agreed to an unconditional cease-fire during which there would be negotiations on a more "durable truce".
"We urge all parties to act with restraint until this humanitarian ceasefire begins, and to fully abide by their commitments during the ceasefire," Kerry and Ban said. "This ceasefire is critical to giving innocent civilians a much-needed reprieve from violence."
The statement was released in New Delhi, where Secretary of State John Kerry is now meeting with Indian officials.
Israel and Palestinian delegation are set to convene in Cairo tomorrow morning to work on a long-term ceasefire deal, the statement said. The Palestinian team is said to include representatives from both Hamas and the Palestinian Islamic Jihad.
A Hamas official accepted the deal and said that all of the "resistance factions" have accepted it as well.
"Acknowledging a call by the United Nations and in consideration of the situation of our people, resistance factions agreed to a 72-hour humanitarian and mutual calm that begins at 8 a.m (0500 GMT) on Friday as long as the other side abides by it," Hamas spokesman Sami Abu Zuhri told Reuters.
In what seems to be a win for Israel, the statement said that "forces on the ground will remain in place" during the truce, implying that Israeli ground forces will not withdraw.
Tunnels have been at the heart of Israel's Gaza offensive, and are currently one of the central stumbling blocks to a ceasefire, with Israel demanding forces remain in Gaza to take out the tunnel system which threatens Israel's southern communities and army bases.
However, though forces are still on the ground it is far from certain they will be allowed to use explosives to demolish the tunnels. The statment only said Israel will be allowed "defense actions" and Ynet's Cabinet sources refused to give further details on the issue.
Finance Minister Yair Lapid said that Operation Protective Edge will continue until the last tunnel connecting Gaza to Israel will be destroyed.
Similar comments were made earlier by Prime Minister Netanyahu, who said "We have neutralized dozens of terror tunnels and we are committed to complete this mission, with or without a cease-fire.
As the extent of the tunnel warren and the lethal threat it poses became known, accusations were leveled against the government and military, which warned about the phenomenon years ago but apparently did not prepare adequate counter-measures.
According to the statement: "This ceasefire is critical to giving innocent civilians a much-needed reprieve from violence. During this period, civilians in Gaza will receive urgently needed humanitarian relief, and the opportunity to carry out vital functions, including burying the dead, taking care of the injured, and restocking food supplies. Overdue repairs on essential water and energy infrastructure could also continue during this period.
"Israeli and Palestinian delegations will immediately be going to Cairo for negotiations with the Government of Egypt, at the invitation of Egypt, aimed at reaching a durable ceasefire. The parties will be able to raise all issues of concern in these negotiations.
"We thank key regional stakeholders for their vital support of this process, and count on a continued collaborative international effort to assist Egypt and the parties reach a durable ceasefire as soon as possible."
Meanwhile, Palestinian President Mahmoud Abbas's Fatah party, which is the de facto leader of the Palestinian Authority, has backed Hamas' demand that the IDF withdraw forces from Gaza during any ceasefire in fighting in Gaza.
It is far from clear this backing was what cleared the way for the deal, which seems to be along the lines of the deal proposed by the Egyptians, and which Israel accepted but Hamas rejected.
Earlier Thursday, Kerry said there is "no promise" of a negotiated cease-fire between Israel and militants in the Gaza Strip, but he said the US remains hopeful.
Mohammed Shatya, considered a close affiliate of Abbas, said the Palestinians awaited Israel's response to the 72-hour ceasefire, which is suppose to lay the ground work for a long-term ceasefire summit in Cairo.
"The Egyptian side is interested in a halt in aggressions, and so are we," Shatya said, adding that "all of the Palestinian factions have agreed, permitting a Palestinian delegation to leave for Cairo."
However, Shatya was quick to add that "they will not permit Israel to leave its forces inside Gaza."
Al Bracha, a member of Hamas' political leadership, said that the Palestinian factions reached an agreement and are willing to go to Cairo for talks.
After an Israeli delegation arrived in Cairo on Wednesday to advance talks for a ceasefire in Gaza, the Palestinian delegation was expected to arrive in Egypt on Thursday night, Al-Manar reported.
The Palestinian delegation includes yet unnamed representatives from both Hamas and Islamic Jihad, and was set to be headed by Palestinian Authority President Mahmoud Abbas.
The Israeli delegation includes Shin Bet chief Yoram Cohen and the head of the Policy and Political-Military Affairs department in the Defense Ministry Maj.-Gen. (Res.) Amos Gilad.
PLO official Wasel Abu-Youssef told Asharq Al-Awsat that there are "talks between Palestinian officials of the highest ranks in order to establish a three- or a five-days ceasefire, following which negotiations will be held in Cairo to reach a permanent agreement."
He said the Palestinian leadership was working alongside the UN, Qatar, Turkey, the US, Russia and others to reach a long-term truce.
Other Palestinian officials said Qatar intends to join forces with Egypt to help reach an agreement.
Associated Press, Reuters and Roi Kais contributed to this report