Israeli forces have pulled out of the northern Gaza Strip, on a day which saw Palestinian militant groups announce ceasefires.
The truce is conditional on an end to Israeli attacks
The withdrawal from the town of Beit Hanoun will allow security control of the area to be handed over to Palestinian police. It took place under the US-sponsored peace plan known as the roadmap.
The pull-out came as Palestinian leader Yasser Arafat's Fatah faction joined hardline Islamic militant groups Hamas and Islamic Jihad in announcing an immediate suspension of attacks against Israel.
An end to violence and Israeli withdrawal from land captured since the Palestinian intifada (uprising) began 33 months ago are two key components of the roadmap.
President George W Bush's National Security Advisor, Condoleezza Rice, had spent the weekend in the region urging Israeli and Palestinian leaders to press ahead with the peace plan.
The BBC's Simon Wilson in Jerusalem says it has been a day of fast-paced events, in which the intense American diplomacy of recent weeks - which has also seen Mr Bush and Secretary of State Colin Powell visit the region - appears to be bearing fruit.
However, a spokesman for Israeli Prime Minister Ariel Sharon responded to the three-month truce called by Hamas and Islamic Jihad by saying it would be ignored by Israel.
The joint Hamas-Jihad announcement said their truce was 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.
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
Fatah had earlier been expected to make a joint declaration with Hamas and Islamic Jihad, but it was delayed by political infighting within the movement.
The group said its ceasefire would last for six months in line with an Egyptian initiative and officials said all the groups in the faction, including al-Aqsa Martyrs Brigades, would abide by it.
Israel has repeatedly dismissed the proposal for a truce as "worthless" and has been pressing the Palestinian Authority to dismantle militant groups altogether.
The US gave a qualified welcome to the ceasefire announcements.
White House spokeswoman Ashley Snee said: "Anything that reduces violence is a step in the right direction. Under the roadmap, parties have an obligation to dismantle terrorist infrastructures. There is more work to be done."
Ms Rice had earlier met Mr Sharon to push for more progress on the roadmap.
Israeli Army Radio said they discussed details of the Gaza pullback, as well as 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.
Condoleezza Rice has been pressing Israel to accept the truce
Israel Radio quoted Ms Rice as saying the fence "presents difficulties", 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.
On Saturday, Ms Rice held four hours of "very positive" talks with Palestinian Prime Minister Mahmoud Abbas - also known as Abu Mazen, Palestinian officials said.
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 Mr 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.