All sides were pressured to give the ceasefire a chance
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The decision by Palestinian factions to temporarily halt attacks against Israel was made under intense pressure in a fragile environment.
But it presents the best chance yet for achieving calm after two and a half years of violence.
Whether it can achieve peace is another matter.
Shortly after the agreement was announced, Israel withdrew from parts of Gaza and handed security control over to Palestinian police.
It was the biggest step taken so far under the internationally-backed peace plan known as the roadmap.
Arab pressure
The truce was accompanied by a number of demands, including a prisoner release and a halt to all Israeli military strikes.
It was negotiated over a period of 10 months, in excruciating stop-and-go talks between Hamas leaders in Damascus and envoys from Yasser Arafat's Fatah movement.
Fatah wanted to get going with the roadmap.
Hamas was coming under increasing pressure to at least suspend the armed intifada and, it seems, wanted to do so from a position of strength.
From the outside, the Hamas leadership in Damascus was being pressed by Arab countries such as Egypt, Saudi Arabia, and even Syria.
All of them were painfully aware of their vulnerability in the new regional order that began to take shape after the 11 September 2001 attacks, and culminated in the US-led occupation of Iraq.
'Political horizon'
From the inside, the Hamas leadership in Gaza was faced with growing public concern about possible clashes between militias and police trying to implement the roadmap, and growing public support for a cessation of violence.
The ceasefire is vulnerable to Israeli attacks on militants
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Palestinian analyst Khalil Shikaki says people were exhausted by Israel's crushing reoccupation of Palestinian areas, and encouraged by US President George W Bush's talk of a two-state solution.
The intifada is littered with failed ceasefire attempts, but Mr Shikaki says the environment is better now than any time in the past.
"This is the first time there is a political horizon, there is a commitment [to non-violence] from the Palestinian prime minister that is not in doubt, and the factions that have in the past opposed a truce are willing to support it," he says.
Ceasefire 'vulnerable'
Hamas' decision was almost certainly a tactical move for an organisation that argues only armed resistance, not negotiations, can end the occupation.
Its compliance is at least partly based on a firm belief that Israel will act to sabotage the truce.
The ceasefire is vulnerable to Israeli strikes on militant leaders as well as attacks by Palestinian radicals.
Renegade Fatah militias such the Al-Aqsa Martyrs Brigades have already carried out one attack since it was announced.
And Israel's most strategic assassinations in this intifada have tended to coincide with Palestinian ceasefire talks.
US credibility
Israel certainly was not happy about the truce.
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The ultimate test will be whether Palestinians see the roadmap developing as a peace process that leads to the end of occupation, or simply a security arrangement for Israel
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It saw the agreement as providing cover for the militant groups, giving them space to regain strength.
It wants the Palestinian Authority to dismantle the militias, not sign agreements with them.
Enter the Americans.
Having launched the roadmap with fanfare, US diplomatic credibility was on the line, it needed to see results.
According to Israeli newspaper reports, the Americans are pressing Israel to give the ceasefire a chance, postponing for now the disagreement over whether and how to disarm the militias.
They have also promised to monitor developments closely.
From a Palestinian point of view, the way to ensure the truce holds is to ease the occupation.
That would increase public support for the roadmap and decrease support for a return to arms.
But the ultimate test will be whether Palestinians see the roadmap developing as a peace process that leads to the end of occupation, or simply a security arrangement for Israel.