A cease-fire between Israel and Hamas was announced on Wednesday after days of bloody fighting and deaths on both sides.
U.S. Secretary of State Hillary Clinton and Egyptian Foreign Minister Mohamed Amr said the cease-fire will be effective at 2 p.m. ET.
The announcement came after furious negotiations between diplomats including Clinton who has been in Cairo for talks with Egyptian president Mohammed Morsi, who has been acting as a mediator between the two groups.
"The people of this region deserve the chance to live in peace," Clinton said at the press conference with Amr announcing the cease-fire.
She called it a "critical moment" for the region.
"Egypt's new government is assuming responsibility and leadership that has long made it a cornerstone of regional stability and peace," Clinton said.
Clinton said that for the cease-fire to hold, "the rocket attacks must end and a broader calm must return."
"There is no substitute for a just and lasting peace," Clinton said. "Now that there is a cease-fire, I am looking forward to working with the foreign minister and others to move this process."
President Obama spoke by phone Wednesday with Israeli Prime Minister Benjamin Netanyahu, thanking him for agreeing to the cease-fire and reaffirming the U.S. commitment to Israel's security.
"The President made clear that no country can be expected to tolerate rocket attacks against civilians," the White House said."The President expressed his appreciation for the Prime Minister's efforts to work with the new Egyptian government to achieve a sustainable ceasefire and a more durable solution to this problem."
The announcement came on a day when a bomb ripped through an Israeli bus near the nation's military headquarters in Tel Aviv wounding at least 27 people.
For a cease-fire to hold, Hamas must to enforce any ceasefire on all factions in Gaza, said retired Israeli Brig. Gen. Mike Herzog, who is now an analyst at the Washington Institute for Near East Policy.
Hamas "seems to be reluctant to force it on others but they'll have to make a choice," he said.
While it is clear that Israel "seriously degraded" Hamas' capabilities, the Palestinian faction designated a terrorist organization by the State Department is still a threat, Herzog says.
Israeli jets and drones have succeeded in destroying weapons caches, smuggling tunnels, weapons manufacturing plants and command and control structures, Herzog said. But Hamas still has "a sizaeable arsenal and still can continue to function," he said.
"To really root them out, Israel would have to go into Gaza" with ground troops, he said.
A lot of Hamas' infrastructure and rocket launchers are inside civilian areas, which poses a challenge to Israel in minimizing Palestinian civilian casualties, he said.
While the details of the cease-fire are still unclear, the agreement is likely to include a sweetener, such as opening up the border with Egypt, which make Hamas "literally the new king of Gaza," said Aaron David Miller, a former U.S. adviser on Arab-Israeli negotiations to Republican and Democratic secretaries of state and now vice president of the Woodrow Wilson Center, a Washington think tank.
If the opening is meaningful, Hamas "will have significant leverage" over smaller rival militant groups that are likely to attempt to spoil the deal with further attacks on Israel, Miller said.
On the streets of Jerusalem reaction to the cease-fire was mixed.
"The Israeli government looks weak in the eyes of the world, in the eyes of the Arab street and worst of all in the eyes of their own citizens who have been facing missile attacks day in and day out since Israel pulled out of Gaza," said Joshua Halickman of Jerusalem.
Fern Reiss, an American currently living in Jerusalem, said "As we go into Thanksgiving, with millions of Israelis in the south still eating dinner in their bomb shelter -- but with the promise of a ceasefire on the horizon -- I am truly thankful for everything we have."
Yael Talker, a resident from Kibbutz Reim near the Gaza border who spoke by phone from Ra'anana, where she has taken refuge from the rockets since last Friday, said before she will return home with her two children, "I'll have to see whether the ceasefire is real. I'll take it day by day. We have no personal bomb shelters and had to sleep in the (reinforced) kindergarten."
"If the ceasefire holds for just a while, it's not enough," Talker said.
Fighting between Israel and Hamas has raged on both sides of the border even as negotiations continued.
Clinton released a statement when she arrived in Cairo saying "I am closely monitoring reports from Tel Aviv, and we will stay in close contact with Prime Minister Netanyahu's team," Clinton said. "The United States stands ready to provide any assistance that Israel requires."
Clinton met with Israeli Prime Minister Benjamin Netanyahu Tuesday night.
The bus exploded about noon on one of the coastal city's busiest arteries, near the Tel Aviv museum and across from an entrance to the Kirya, Israel's national defense headquarters.
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The bus was charred and blackened, its side windows blown out and its glass scattered on the asphalt.
An Israeli driver who witnessed the explosion told Army Radio the bus was "completely charred inside." Another witness said there were few passengers on the bus when it exploded.
Police spokesman Micky Rosenfeld said authorities were investigating whether the bomb had been planted and left on the bus or whether it was the work of a suicide bomber.
Israeli aircraft pounded Gaza with at least 30 strikes overnight, hitting government ministries, smuggling tunnels, a banker's empty villa and a Hamas-linked media office located two floors above the office of the French news agency, Agence France-Presse.
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A Haaretz-Dialogue poll found that 84% of Jewish and Arab Israelis expressed support for the latest bombing operation, called Operation Pillar of Defense. But only 30% said they would support an all-out ground operation into Gaza.
Israel's usually vocal political left-wing has largely refrained from criticizing the prime minister's decision against a cease fire at a time when half the Israeli population is living under the threat of Palestinian rocket fire.
Hagit Ofran, spokesperson for Peace Now, a group promoting territorial compromise, called Wednesday's bus bombing "a brutal attack that horrifies every Israeli." She said Israel's precarious security situation "reinforces the urgent need for an agreement" resulting in "a two state solution."
Gerald Steinberg, a political scientist at Bar Ilan University, predicted Netanyahu will be able to maintain the military operation until "the (Israeli) casualties start to increase and people start questioning the benefits."
Contributing: Vanessa O'Brien, Naser Najjar and Oren Dorell; Associated Press.
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