Both Israel and the Palestinians have agreed on a halt to hostilities in the Gaza Strip, senior officials say.
The Israeli military has acted against rocket attacks from Gaza
Palestinian leader Mahmoud Abbas has won a commitment from all militant groups to halt rocket attacks on Israel from the Gaza Strip, his office said.
Israeli Prime Minister Ehud Olmert has in return agreed to halt hostilities, his spokeswoman said. The ceasefire will begin at 0600 (0400GMT) on Sunday.
BBC correspondents say the announcement is unexpected and a major development.
Israel had said its Gaza operation was to prevent cross-border rocket attacks.
Earlier on Saturday, at least one Hamas activist was killed by an Israel air strike on Gaza, Palestinian officials said.
Two cars were targeted, and four men were reported injured.
'Chance for stability'
The BBC's Alan Johnston in Gaza says it seems Mr Abbas phoned his opposite number on Saturday evening to say he had agreement from all Palestinian factions that they would stop their rocket fire.
This offer was received well by the Israelis, our correspondent says, and they agreed that they would halt hostilities in Gaza.
Mr Olmert is said to believe the ceasefire is a chance for stability
However, it is not yet clear whether Israeli troops will have withdrawn from the Gaza Strip by the time the ceasefire comes into effect.
A spokeswoman for the Israeli prime minister, Miri Eisin, told the BBC that Mr Olmert had agreed that Israeli forces would not initiate any offensive action after that time.
But she said Mr Olmert had made it clear that it might take some time to pull all Israeli troops out of the Gaza Strip if the ceasefire held.
Ms Eisin said Mr Olmert believed this was a chance to achieve stability and one that Israel could not miss.
The BBC's Simon Wilson in Jerusalem says that although there has been talk of a possible ceasefire in recent weeks, such a direct acknowledgement from the Israeli prime minister's office comes as a surprise.
Officials have indicated in the past that they do not believe Mr Abbas has the power to enforce a ceasefire among Palestinian groups, he says.
Palestinian militant groups have been firing Qassam rockets into Israel on a daily basis. They have killed two Israeli civilians in the past 10 days.
Israel has launched frequent ground offensives into Gaza Strip to try to stop the militants who launch the rockets.
It has also shelled targets in Gaza heavily.
Israel evacuated its settlements and military bases in Gaza last year, but the military renewed ground operations after militants captured an Israeli soldier in a border raid in June.
Since June, Israeli troops have killed more than 400 Palestinians in Gaza, roughly half of them civilians.
Three Israeli soldiers have died in operations.