Israel halted its military offensive in the Gaza Strip after three weeks of fighting at 7 p.m. ET Saturday.
However, the ceasefire does not involve Hamas, who say they won't respect it.
Israel leaders voted during an emergency security meeting to discontinue the fighting today. During the ceasefire, Israeli soldiers will remain in the Palestinian territory, while a long-term truce is worked out with international help.
The Israeli military has warned it will respond to attacks from Gaza militants.
Hamas spokesperson Fawzi Barhoum told The Associated Press a unilateral truce is not enough.
"The occupier must halt his fire immediately and withdraw from our land and lift his blockade and open all crossings and we will not accept any one Zionist soldier on our land, regardless of the price that it costs," he said.
The Bush administration welcomed the development, and Secretary of State Condoleezza Rice urged both sides to cease fighting immediately.
British Foreign Secretary David Miliband expressed "huge relief" after the move.
The latest conflict began on Dec. 27, when Israel launched a massive air strike aimed at stopping Hamas from firing rockets into its border towns. Since then, nearly 1,200 Palestinians have been killed - at least half of them civilians, according to local medics.
Israel has suffered 13 deaths, including three civilians.
It's unclear how the ceasefire will work without the agreement of Hamas, which has demanded Israel end its blockade of all border crossings.
Even as Israeli officials voted on the ceasefire, Israeli troops hit 50 Hamas targets, military officials said, including rocket-launching sites, smuggling tunnels, weapons storehouses, bunkers and minefields.
In one incident, several shells hit a United Nations school that was housing refugees who had fled the fighting, according to both the UN and eyewitness accounts. The attack killed two boys, according to UN spokesperson Chris Gunness.
Gunness condemned the attack, saying about 1,600 people had taken shelter in the school, which is located in the northern town of Beit Lahiya.
The Israeli military would not comment on the incident. However, Gunness called for an investigation, saying that Israel knew the location of the school and that it was being used as a shelter for civilians.
Hamas, which has ruled Gaza since June 2007, wants Israeli troops to immediately withdraw from the territory. It also wants an end to the blockade on border crossings.
With files from The Associated Press
