A ceasefire announced by Hamas largely held Saturday after a wave of deadly air strikes across the Gaza Strip sparked by the death of an Israeli soldier shot along the volatile border.
Israel did not confirm the deal announced by Gaza's rulers, which went into effect around midnight Friday reducing fears of a wider conflict.
Israel's government and army rarely acknowledge ceasefires with Hamas, but a military spokeswoman said civilian life should return to normal in areas next to Gaza.
The Israeli army also said a tank struck a Hamas observation point east of Gaza City on Saturday morning, saying it was retaliation for an attempted border infiltration in northern Gaza.
There were no reports of injuries in that strike and there was no major Israeli bombing campaign overnight or mortar fire from Gaza toward Israel.
"With Egyptian and UN efforts, we reached (an agreement) to return to the previous state of calm between the (Israeli) occupation and the Palestinian factions," Hamas spokesman Fawzi Barhoum said in a statement early Saturday.
A senior Hamas official, speaking on condition of anonymity, told AFP the deal involved "the cessation of all forms of military escalation" including Israeli air strikes and Hamas mortars and rockets.
The source said that balloons and kites attached with incendiary devices, which Palestinians have been floating over the border for months to spark fires inside Israel, were not included in the agreement.
Israeli politicians have been calling for a fierce response to the kites and balloons, which have caused damage amounting to millions of shekels (hundreds of thousands of dollars).
Israel's army and Prime Minister Benjamin Netanyahu's office declined to confirm a truce was reached.
"All we can say is that there have been no incidents or Israeli attacks in the Gaza Strip since the last wave of airstrikes on Friday night," a military spokeswoman told AFP.
On Friday, three Hamas militants were killed as air raids sent fireballs exploding into the sky over Gaza, while Israel said rockets had been fired back at its territory. A fourth Palestinian was shot dead in protests near the border.
The United Nations urged all sides to step "back from the brink" of war after months of increasing tensions.
The soldier, shot dead along the border in southern Gaza, was the first to be killed in and around the Palestinian enclave since a 2014 war between Israel and Hamas.