Egyptian Foreign Minister Mohammed Kamel Amr (R) and US Secretary of state Hilary Clinton
© AFP

Israel and the Islamist Hamas group agreed to an Egyptian-brokered ceasefire on Wednesday, ending a bloody eight-day conflict in and around the Gaza Strip that has claimed the lives of at least 152 Palestinians and five Israelis.

The truce was announced in Cairo by Mohammed Kamel Amr, the Egyptian foreign minister, in a joint press conference with Hillary Clinton, the US secretary of state.

Mr Amr said the recent diplomatic effort had produced “understandings to cease fire and restore calm and halt the bloodshed that the last period has seen.”

Mrs Clinton praised Cairo for bringing about an end to the violence, adding that the agreement should usher in “improved conditions for the people of Gaza and security for the people of Israel”.

Speaking minutes before the ceasefire was due to enter into effect, Israel’s prime minister, Benjamin Netanyahu, said that “the right thing for the state of Israel to do is to exhaust this opportunity for a lasting ceasefire”.

The White House said that Barack Obama, the US president, had thanked Mohamed Morsi, his Egyptian counterpart, for “his personal leadership” in negotiating the ceasefire.

The announcement appeared to end the deadliest clash between Israel and Hamas since the end of the Gaza war four years ago. The conflict started last week with an Israeli strike on the commander of the Hamas military wing – an assault prompted by Israeli concern over what it said was increasingly aggressive Gaza-based militants.

The ceasefire was agreed just hours after a bomb exploded on a bus in Tel Aviv, injuring 24 people. The blast rekindled fears of a return to the wave of bus bombings that blighted Israeli cities a decade ago but ultimately failed to derail frantic diplomatic efforts to secure a truce. Hamas denied any responsibility for Wednesday’s bombing, which was instead claimed by a Syrian-based group.

According to an Egyptian text of the agreement, both sides would end all hostilities, including Israel’s targeting of individuals, an apparent reference to assassinations of Hamas officials, and Palestinian rocket fire and cross border attacks.

The text also said that the issue of opening Gaza’s border crossing and allowing the movement of people and goods into and out of the strip would be “dealt with” 24 hours after the ceasefire takes effect.

Speaking at a press conference in Cairo, Khaled Meshaal, the leader of Hamas said the terms of the agreement showed that “resistance was the [right] choice”.

“This is a major prelude for lifting the blockade,” he said. “This is our route to the liberation of Palestine.”

Essam Haddad, the foreign relations adviser to Mr Morsi, told the Financial Times that the agreement would allow for a reopening of crossings from Israel and Egypt in 24 hours, starting with humanitarian goods. As procedures are agreed between the two sides, other items would also be allowed in, including building materials, he said.

Speaking on Wednesday night, an Israeli official insisted that his government had only committed itself to holding talks on the issue but signalled a readiness to compromise. “The [border] restrictions were imposed because there were hostilities . . . if there are no hostilities then it is easier for Israel to show flexibility.”

Diplomats and officials suggested the ceasefire was only a first step and would still have to be followed by negotiations on a list of issues put forward by Israel and Hamas. Mrs Clinton said she would work with partners in the region to consolidate the progress achieved in Cairo.

A key Israeli demand is for measures to curb the flow of rockets and other weapons into Gaza. Mr Obama told Mr Netanyahu on Wednesday that the US would step up efforts to help end the smuggling of weapons and explosives into Gaza, according to the White House.

Israeli military and political leaders were widely believed to be reluctant to order a further escalation of the conflict. There was particular concern over the prospect of a ground invasion of Gaza, which would have sharply increased the death-toll on both sides and exposed Israel to widespread international condemnation.

Israel is also hoping eight days of heavy bombardment have done enough to deter Hamas and other Gaza-based militant groups from resuming rocket attacks.

A senior Israeli military official acknowledged, however, that the rocket threat had not been entirely eliminated: “I think we caused severe damage to their military capability. At the same time, we assume that they still have relevant capability to continue the campaign.”

The official said that Israel’s strikes on Gaza had destroyed most of Hamas’s longer-range missile arsenal and much of the group’s medium-range capability. He said, however, that Hamas and other Gaza-based groups still had several thousand short-range rockets and missiles able to strike targets within a 40km radius.

Additional reporting by Geoff Dyer in Washington and John Reed in Jerusalem

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