"I am pleased to be able to announce today that Israel and the Palestinian authorities have approved an agreement on access," Rice told a news conference on Tuesday. "This agreement is a good step forward."
Rice, who put her reputation at stake by investing personally in the negotiations, had postponed her departure to Asia for an APEC meeting, staying in Jerusalem an extra day until she got a deal on opening the Gaza-Egypt border on Tuesday.
Access to Gaza is key to strengthening the impoverished strip's economy and giving a boost to chances for peacemaking after Israel's withdrawal from Gaza in September.
Addressing the media in Ram Allah on Tuesday, an event broadcast live by Aljazeera, Palestinian Civil Affairs Minister Mohammed Dahlan elaborated on the agreement to re-open the Rafah terminal - the Gaza Strip's gateway to the outside world - with effect from 25 November.
Under the deal, Palestinians will be able to operate a bus service through a passage between the West Bank and Gaza Strip by the middle of next month, Dahlan said, adding that the arrangement was supported by international guarantees.
Rice too said the Rafah crossing was targeted for reopening on 25 November, and the deal also called for Palestinian convoys to start travelling between Gaza and the West Bank within a month.
Rice said construction on a Gaza sea port could also begin.
Israeli sources said the sides had agreed to the presence of cameras at the Rafah border, and that Israeli and Palestinian officers would monitor the video feed from an operations room several kilometres away.
Palestinians had insisted that the Israelis should not sit at Rafah.
Mohammed Dahlan (2nd R) with
EU officials at the Rafah terminal
Aljazeera's bureau chief in Palestine Walid al-Umari said there would be a joint operation room or a liaison office set on Kerim Shalom crossing east of Rafah.
The joint office will include Palestinians, Israelis and Europeans. Its function is to control and monitor the movement and passage of passengers and goods through the Rafah crossing, he said.
Israel will not have the veto right, but it has the right to appeal to Europeans who will have the final word as they would control the crossing, Aljazeera's al-Umari said.
Palestinian customs on Kerim Shalom crossing will follow up the access of goods into the Gaza Strip, while Rafah will be used for transporting goods out of Gaza and for the access of Palestinian passengers.
Movement of diplomats into the Gaza Strip and humanitarian cases will be agreed upon in advance, and visitors other than Palestinians will cross via Kerim Shalom crossing, al-Umari added.
Israel, which has kept control of Gaza's borders and air space since its withdrawal, has been under US pressure to reopen the crossing, Gaza's main outlet to the rest of the world.
It has been largely closed since Israel withdrew.
Envoy James Wolfensohn was
involved in the negotiations
Both sides had previously agreed to European Union observers at Rafah, and differences centred on Israeli monitoring of the crossing.
Israel had wanted a direct, online surveillance feed, while the Palestinian Authority wanted control over the pictures and said a direct feed would impinge on its sovereignty.
The international Quartet's envoy, James Wolfensohn, said he considers the agreement an important step towards realising the vision of the Quartet's road map peace plan .
Speaking to Aljazeera, Wolfensohn noted however that the success of the agreement was dependent on implementation by each party of its obligations.
"The Quartet will seek to help facilitate the recovery of the Palestinian economy as well as to resolve outstanding issues," he said.
Aljazeera said the Islamic resistance group Hamas on Tuesday announced its rejection of the agreement, which it said would undermine Palestinian sovereignty and dignity.
In a statement released by the group, Hamas said it disagreed with the Palestinian Authority's (PA) acceptance of the arrangement, and claimed the PA was projecting the deal as a great achievement.
Hamas said the deal would turn Gaza into a huge prison run by what it called the guardians of control over entry into and exit from the strip, while permitting Israel to monitor the movement of residents.
The statement further said the deal confirmed that Israel's withdrawal from Gaza was incomplete and that Palestinian sovereignty was still in Israeli hands.