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A ceasefire brokered between Israel and Hamas continued to hold Thursday, despite urgings for an all-out war by some Muslim extremists in the region.

The truce was arranged Wednesday with the help of U.S. Secretary of State Hillary Clinton and Egyptian President Mohamed Morsi.

But the head of Egypt's powerful Muslim Brotherhood denounced the peace efforts Thursday, urging for a holy war to free the Palestinian territories.

"The enemy knows nothing but the language of force," said Mohammed Badei, in a statement posted to the group’s website. "Be aware of the game of grand deception with which they depict peace accords."

The Muslim Brotherhood, which is highly influential in the region, refuses to acknowledge Israel's statehood.

Badei also said jihad is "obligatory" for Muslims, though he added that armed conflict would be the "last stage" and would only happen after Muslims achieved unity. Instead, he called on Muslims to support their "brothers" in Palestine. "Supply them with what they need, seek victory for them in all international arenas."

The recent bout of fighting started a week ago when Israel responded to rocket fire from Gaza. Israel hit the region with roughly 1,500 airstrikes on Hamas targets, while Hamas and other Gaza-based militants returned fire with a salvo of hundreds of rockets.

With 161 Palestinians killed, including 71 civilians, and six Israelis left dead, the international community stepped in to broker a truce earlier this week.

Under the deal, Gaza's ruling Hamas is to stop rocket fire into Israel while Israel is to cease attacks and allow the opening of the strip's long-blockaded borders.

"It seems to be working," said CTV's Janis Mackey Frayer. "There were reports of some rockets fired from Gaza overnight but there was no Israeli response. Hamas had appealed to people over its Al Aqsa television to respect the ceasefire that is in effect. And on Israel's side as well, there was the commitment of Israeli President Benjamin Netanyahu that the army would stand down."

UN Secretary-General Ban Ki-moon had appealed to both sides to take a breather from the fighting in order to lower the temperature and set the stage for peace talks. While U.S. President Barack Obama himself was not involved in the negotiations, U.S. Secretary of State Hillary Clinton played a key role in brokering the ceasefire, along with Egyptian representatives.

"It seemed to be the stamp of approval all sides were looking for, to have the U.S. secretary of state standing beside the Egyptian foreign minister and making the announcement of the ceasefire," Mackey Frayer told CTV's Canada AM.

The ceasefire triggered celebrations in the Gaza Strip Thursday as residents began to clean up the rubble from days of intense bombardment. Residents appeared hopeful that a new era of relations was about to begin.

Hamas leaders along with thousands of Palestinians took to the streets waving flags and declaring victory over Israel.

"Today is different, the morning coffee tastes different, and I feel we are off to a new start," Ashraf Diaa, a 38-year-old engineer from Gaza City, told The Associated Press.

Meanwhile, Israeli officials flew to Cairo where negotiations are set to begin on a deal that would ease the blockaded Palestinian territory.

Netanyahu said the offensive's aims of halting Gaza rocket fire and weakening Hamas were achieved. "I know there are citizens who were expecting a harsher response," he said, adding that Israel is prepared to act if the ceasefire is violated.

Israeli officials also made it clear that their position had not warmed toward Hamas which they say aims to destroy the Jewish state with the help of Iran.

"Without a doubt, Israel in the long run won't be able to live with an Iranian proxy on its border," Israeli Foreign Minister Avigdor Lieberman told Israel's Channel 10. "As long as Hamas continues to incite against Israel and talk about destroying Israel they are not a neighbour that we can suffer in the long run. But everything in its time."

After days of bloodshed, deep hostilities between both sides, and the vague language of the ceasefire, there was little certainty that the peace would last or that the truce signalled the beginning of long-lasting change.

The eight days of fighting led to the death of 161 Palestinians, 71 of which were civilians.

Six Israelis-- two soldiers and four civilians—were also killed and dozens others wounded by rockets fired into residential neighbourhoods.

While Hamas is considered a terrorist organization by Israel and the West, the U.S. was forced to engage in indirect political diplomacy with the militant group, which has held Gaza since 2007.

"It has created this interesting new dynamic in the region where the U.S. is now actually partnering with the Muslim Brotherhood in Egypt and indirectly helping to facilitate talks with Hamas," Mackey Frayer said.

"This was all seen as necessary for there to be a degree of regional stability because as the Egyptian foreign minister warned, if Israel did push on with a ground offensive, there would be significant security repercussions for the region."

Israeli Defense Minister Ehud Barak, meanwhile, defended his decision avoid a ground offensive, in contrast to Israel's invasion of Gaza in the winter of 2008-2009.

"You don't get into military adventures on a whim, and certainly not based on the mood of the public, which can turn the first time an armoured personnel carrier rolls over or an explosive device is detonated against forces on the ground," he told Israel Army Radio.

"The world's mood also can turn," he said, referring to warnings by the U.S. and Israel's other allies about the high cost of a ground offensive.

As part of the cease-fire, Israel received U.S. pledges to help control arms shipments to Gaza.

Thousands of Israeli soldiers who had been sent to the border during the fighting withdrew Thursday, the military said.