A number of immediate steps have been agreed, while more complex issues will be addressed in further talks set to begin within a month.
After the success of the Ice Bucket Challenge, the people of Gaza are using rubble and dirt instead of cold water to highlight their plight.
There have been two days of quiet in Gaza. No rockets or missiles, no more destroyed houses, no more ambulance sirens screaming.
Israeli Prime Minister Benjamin Netanyahu's spokesman has said that talks in Egypt will only go ahead if there is a "total end to terror attacks from Gaza".
Israel accepts Egyptian ceasefire proposal, as we did 7/15. Cairo talks on Gaza's future only if total end to terror attacks from Gaza.
Hundreds of Palestinians have spilled onto the streets of Gaza City to celebrate the announcement of a ceasefire which is being claimed as a victory by Hamas.
Drivers honked their horns and people walked through the streets cheering and waving Palestinian flags.
One reveller, named Mahmoud Saadeldeen, said: "It's an indescribable feeling ... we were holding on and waiting and thanks to God we won and the blood of our martyrs was not spilled in vain."
A spokesman for UN Secretary-General Ban Ki-Moon has said that any violation of the ceasefire agreed today would be "utterly irresponsible".
He said the blockade of Gaza must end, and that the territory must be brought back under the control of one legitimate Palestinian government adhering to Palestine Liberation Organisation commitments.
"Israel's legitimate security concerns must be addressed," he added.
Hundreds of Palestinians have taken to the streets to celebrate what some see as a victory over Israel as the latest ceasefire begins.
Indirect talks between Israel and the Palestinians are due to start within one month, a statement from Egypt's foreign ministry said.
Israel has agreed to allow humanitarian aid and reconstruction materials to enter the Gaza Strip as part of a ceasefire agreement, according to a statement from the Egyptian foreign ministry.
Sirens warning of rocket attacks in southern Israel sounded in the minutes after the Gaza ceasefire was due to take effect.
The Associated Press report that an Israeli citizen has died and two more were seriously injured in a flurry of rocket fire from Gaza into southern Israeli shortly before the ceasefire.
A senior Israeli official has confirmed that Israel accepts an Egyptian proposal for a ceasefire in Gaza, Reuters reports.
"Israel has accepted an Egyptian proposal for a complete and unlimited-in-time ceasefire," the official said, speaking on condition of anonymity.
The Gaza ceasefire will begin at 5pm tonight (4pm GMT), according to Egypt's MENA state news agency.
Am official announcement on a new ceasefire between Hamas and the Palestinians could be made within the next two hours, a spokesman for the Palestinian Popular Resistance Committees said.
A spokesman for Israeli Prime Minister Benjamin Netanyahu declined to comment.