The Israeli cabinet has approved an Egypt-brokered ceasefire agreement at an emergency meeting, but the fate of the truce rests with Hamas militants who had earlier rejected the proposal.
Israel's Foreign Minister Avigdor Lieberman and Economy Minister Naftali Bennett were the only ones who voted against the proposal.
Local reports suggest US Secretary of State John Kerry, who was scheduled to visit Cairo to coordinate the ceasefire efforts, has cancelled his trip and will instead fly straight to the US from Vienna. This is yet to be officially confirmed.
Even though the ceasefire agreement has come into force, the Israeli Defence Forces (IDF) have told residents to stay alert.
Earlier, the armed wing of Hamas rejected any ceasefire option in the ongoing Israel-Gaza conflict. Vowing to "intensify" the fighting, the militant group insisted they will not lay down their arms as long as Israeli forces are occupying Palestinian territories.
'It's a surrender'
"No official or unofficial side has approached us about the ceasefire talked about in the media... [But] if the contents of this proposal are true, it is a surrender and we reject it outright," according to a statement from the Ezzedine al-Qassam Brigades.
Hamas said the Egyptian proposal "isn't worth a thing. Our battle with the enemy will escalate and we will be true to the blood of the martyrs".
The ceasefire proposal was originally put forth following a series of high-level talks in Cairo in which all sides participated.
Although the armed wing opposed the truce, the political arm of the group, which controls Gaza, confirmed they are discussing various options in a bid to resolve the crisis.
Ismail Haniyeh, the deputy chief of the Hamas political bureau, said in a televised statement aired by the al-Aqsa channel: "Yes there are contacts and there are countries intervening.
"Our people were avoiding the war but the Zionist enemy began it, he announced it, he prepared for it, he started to kill the women, children and families, destroy homes. Entire families were eliminated.
"Every drop of blood is dear to us. My heart and all the people are standing beside these families, but this bloodshed pushes us towards being more committed to our rights and to stopping this aggression, to end this situation in Gaza and West Bank."
The Egyptian initiative was welcomed by the US which expressed the hope that "this will lead to the restoration of calm as soon as possible".
In the week-long confrontation, at least 178 Palestinians have been killed and more than 1,000 injured. So far there have been no casualties on the Israeli side.