Recovery teams are working to pull bodies out of the rubble in areas that have so far been too dangerous to enter.
They have retrieved the bodies of at least 25 people, including children, and the number is expected to rise steeply.
The Palestinian faction Hamas - the de facto rulers of Gaza - was not consulted in Israel's unilateral cessation, and Hamas leaders say the "resistance movement" will continue to fight as long as Israeli troops remain inside the territory.
They also maintain their pre-war demand that Israel ends its crippling 18-month blockade of the Palestinian territory to allow for the free flow of goods in.
Ahmed Yousef, a Hamas adviser in Rafah, southern Gaza, told Al Jazeera on Sunday: "When Israel announced it is going to have a unilateral ceasefire to us while they're still in town, occupying Gaza, and they are not talking, or showing that they have accepted the initiative or proposal from Egypt, I think we have a right to defend ourselves.
"They know, as long as they are still in Gaza, we have to defend ourselves and we have to fire rockets, also to show the world community there are still Palestinians who are suffering from occupation and sanctions."
The toll last stood at 1,203 Palestinians killed during more than three weeks of Israeli onslaught in the territory.
According to UN and Palestinian medical sources, around 400 of the dead were children, and another 100 were women.
Thirteen Israelis have also died since the start of hostilities on December 27.
Medics reported pulling the bodies of 25 more Palestinians out of Gaza's rubble on Sunday.
Fighting broke out in Jabaliya on Sunday, as Israeli military aircraft dropped flares into the northern Gaza Strip.
Under the so-called cessation of its offensive in Gaza, the Israeli military said it would "respond to any attack against Israeli civilians or soldiers".
"We have heard a number of sustained gunshots," Al Jazeera's Zeina Awad reported from the Gaza-Israeli border.
"There is also a thick layer of cloud which would reduce the visibility on the ground in Gaza.
"We saw four rockets launched, literally within seconds of each other. We also heard the sirens going off in Israel."
Israeli reconnaissance drones and helicopters could be heard throughout the night, and Gaza residents said they could hear troops and tanks rolling through the streets.
Palestinians said they feared the assault could resume at any moment.
Israel kept up its assault until the last hour, carrying out more than 50 air raids overnight.
The Israeli military claims to have significantly damaged the capability of Hamas by killing a number of its senior commanders, as well as destroying its weapons stockpiles and smuggling tunnels.
|Some Israeli soldiers have returned but others remain in the Gaza Strip [Reuters]
Yet in the 24 hours before Israel's ceasefire, Hamas's military wing and other armed Palestinian groups were reported to have fired more than 30 rockets and mortar rounds over the border - a signal that it still has firepower.
Analysts exhibited only scepticism that the halt in violence would last.
Rami Khouri, director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut in Lebanon, told Al Jazeera that the "unilateral ceasefire has no chance of being a durable ceasefire".
"Israel has tried many unilateral approaches and each one of them has simply made the situation worse for Israel," he said.
"There is no chance of any unilateral move by Israel having any success. It has to be a negotiated agreement that responds to the basic legitimate needs of both sides."