Gaza Crisis: Israel and Palestinians Agree Ceasefire after Cairo Talks

Israel and Gaza have agreed to halt hostilities to bring an end to eight days of violence.

The truce was due to come into force from 7pm GMT. A ceasefire deal allegedly agreed for Tuesday failed to materialise.

Early reports after the truce came into effect said drone aircraft were seen over Gaza.

Fierce fighting has killed 136 Palestinians and five Israelis and a bomb was detonated on a bus in Tel Aviv, wounding up to 25 people.

The Egyptian foreign minister and US secretary of state HiIlary Clinton helped broker the latest peace agreement between the sides at the foreign ministry in Cairo.

Israeli prime minister Benjamin Netanyahu reportedly told Barack Obama he was "willing to give the ceasefire a try" but added military action could be resumed if the ceasefire was breached.

The Palestinians are calling for the siege of Gaza by Israel, which wants protection from attacks from within Palestinian territory. It is understood that Israel is not willing to lift the blockade, as demanded by Hamas - the fundamentalist Islamic organisation in charge in Gaza.

Announcing the truce, Clinton said that Egypt was assuming "responsibility and leadership" in the troubled region.

"People of this region deserve the chance to live free from violence and today's agreement is a step in the right direction that we should build on," said Clinton.

"Now we have focus on reaching a durable outcome which promotes regional security. [Egypt's] President Mursi discussed how the USA and Egypt can work together to support the next stages in that process.

"In the days ahead the US will work with partners to consolidate progress, improve conditions for Gaza and provide security for Israel. Ultimately every step must move us towards a comprehensive peace for all people of the region. There is no substitute for a just and lasting peace."