Israeli soldiers are to suspend their military
operations in Gaza

How did the ceasefire come about?

The ceasefire followed talks between Mahmoud Abbas, the Palestinian president, and the leaders of Palestinian armed groups, including the governing Islamist group Hamas.

The truce reinstates a 2005 agreement between the Palestinian Authority and armed groups to stop attacks on Israel including rocket strikes and suicide bombings.

In return Israel has said it will suspend its military assault on Gaza.

Is the ceasefire holding?

Islamic Jihad and Hamas have fired several rocket barrages at southern Israel after the ceasefire went into effect, though Hamas political leaders said the group was committed to the truce.

Israel said it would hold its fire too see what happened, but threatened to respond if the salvoes continue.

What does it mean for peace negotiations?

A ceasefire, if it holds, seems likely to lead to a long-awaited summit between the Israeli prime minister, Ehud Olmert and Abbas.

But Israel says it will not deal with the governing Hamas movement until the Islamic group meets international demands to recognise the Jewish state, renounce violence and accept existing interim peace accords.

What does Israel have to gain from a ceasefire?

An end to daily rocket attacks on southern Israel, particularly the frequently-hit town of Sderot.

The strikes have hurt Olmert politically at a time when his popularity ratings are already low following Israel's inconclusive 34-day war against Hezbollah fighters in Lebanon last summer.

What about the Palestinians?

More than 400 Palestinians have been killed by Israeli forces in the crushing Gaza military offensive, hospital officials have said.

The strikes hurt Olmert politically at a time when his popularity ratings are already low following Israel's inconclusive 34-day war against Hezbollah fighters in Lebanon last summer

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Palestinians will welcome an end to the assault that intensified after Palestinian fighters captured an Israeli soldier, who is still being held.

Some Palestinian groups, including Abbas's Fatah faction, hope the ceasefire will lead to a resumption of full peace talks with Israel.

Agreement on the terms of a ceasefire also bodes well for ongoing lengthy negotiations between Hamas and Fatah on the formation of a Palestinian unity government.

Prisoner talks?

Talks mediated by Egypt to arrange the release of the captured soldier, in exchange for more than 1,000 Palestinian prisoners held in Israel, have stalled.

But in a sign of possible progress, the Damascus-based Hamas political leader, Khaled Meshaal, arrived in Cairo last week for talks on the swap.

A deal could involve Palestinian prisoners being handed to Abbas and not to Hamas, and will be high on the agenda of any meeting with Olmert.

What about the proposed Palestinian unity government?

Abbas and Ismail Haniyeh, the Palestinian prime minister, who is also a Hamas leader, co-operated in brokering a ceasefire, but they still have to work out key details of a unity government.

Both say they want to form to help ease economic sanctions imposed by the West.

Among the issues still outstanding is who will run the Interior Ministry, which controls several security services.