The truce is conditional on an end to Israeli attacks
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Yasser Arafat's Fatah faction has joined hardline Islamic militant groups Hamas and Islamic Jihad in announcing an immediate suspension of attacks against Israel.
Just as the Fatah announcement came Israeli tanks began pulling out of Palestinian territory in northern Gaza, in line with the US-brokered peace plan know as the roadmap.
Earlier a spokesman for Prime Minister Ariel Sharon responded to the Hamas-Jihad truce by saying the truce announcement would be ignored by Israel, but the US called it "a step in the right direction".
Fatah had earlier been expected to make joint declaration with Hamas and Islamic Jihad, but it was delayed by political infighting within the movement.
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ROADMAP MAIN POINTS
Phase 1 (to May 2003): End to violence against Israelis and Palestinians; Palestinian political reform; Israeli withdrawal and freeze on settlement expansion; Palestinian elections
Phase 2: (June-Dec 2003) Creation of an independent Palestinian state; international conference and international monitoring of compliance with roadmap
Phase 3 (2004-2005): Second international conference; permanent status agreement and end of conflict; agreement on final borders, Jerusalem, refugees and settlements; Arab states to agree to peace deals with Israel
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Also on Sunday, Palestinian leader Yasser Arafat dispatched chief negotiator Saeb Erekat to try to persuade the jailed leader of the Popular Front for the Liberation of Palestine (PFLP), Ahmad Saadat, to sign up to the ceasefire.
Mr Erekat said he had been told the PFLP would not join the ceasefire declaration, but nor would it violate the truce.
The Hamas-Jihad announcement said the two groups commit themselves to suspending attacks for three months with immediate effect.
The truce is conditional upon several factors, including a halt to Israeli military operations in Palestinian areas and the policies of killing Palestinian militants and demolishing Palestinian homes.
The development coincides with progress in talks between Israeli and Palestinian security officials to work out details of an Israel pullback from parts of Gaza expected to take place in the coming days.
Israel has repeatedly dismissed the proposal for a truce as "worthless" and has been pressing the Palestinian Authority to dismantle militant groups altogether.
But White House spokeswoman Ashley Snee said: "Anything that reduces violence is a step in the right direction. Under the road map, parties have an obligation to dismantle terrorist infrastructures. There is more work to be done."
US pressure
US National Security Advisor Condoleezza Rice earlier met Mr Sharon to push for more progress on the roadmap plan.
Ms Rice has been pressing Israel to accept the truce
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Israeli Army Radio said they discussed details of the Gaza pullback, as well easing restrictions on Palestinians, prisoner releases and the possibility of rebuilding Gaza airport.
During talks with the Israeli cabinet, Ms Rice is reported to have criticised the building of a fence around Palestinian areas in the West Bank, which Israel says is to stop militant attacks.
The fence "presents difficulties", Ms Rice is quoted by Israel Radio as saying, which the US administration views as "an attempt to demarcate a political border" and to pre-empt any negotiated settlement.
Israeli ministers insisted that the 350-kilometre (210-mile) fence was solely for security purposes and would not back down on its construction.
White House invitation
Ms Rice held four hours of "very positive" talks with Palestinian Prime Minister Mahmoud Abbas - also known as Abu Mazen - on Saturday, Palestinian officials said.
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I feel hopeful about peace for the first time in ages
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During the meeting in the West Bank town of Jericho, Abu Mazen accepted an invitation to the White House in the coming days, according to Palestinian officials.
He would be the first Palestinian leader at the White House for three years; President Bush has shunned Palestinian Authority president Yasser Arafat, accusing him of being "compromised by terror", while the Israeli prime minister has been invited there several times.
Officials said Ms Rice had responded positively to Palestinian concerns, agreeing on the importance of Israeli withdrawals from all Palestinian areas as soon as possible.
Palestinian cabinet minister Yasser Abed Rabbo said Abu Mazen also urged Ms Rice to press the Israelis to release Palestinian prisoners.