The Egyptian Foreign Minister announced the deal alongside Hillary Clinton
Israel and the Hamas movement which governs Gaza have agreed a ceasefire to end a week of violence in which nearly 160 people have died, Egyptian and Hamas officials say.
It is intended to come into effect at 19:00 GMT (21:00 local time), the officials say. Similar predictions on Tuesday failed to produce a deal, reports the BBC.
A bomb exploded on a bus in the Israeli city of Tel Aviv, leaving three people needing surgery.
At least 13 people were killed in Gaza.
Egyptian Foreign Minister Kamel Amr announced the ceasefire at a news conference in Cairo with US Secretary of State Hillary Clinton, who joined negotiations on Wednesday.
The details of the deal are not yet clear, says the BBC's Middle East editor Jeremy Bowen.
Israel's demands included an end to hostile fire of any kind from Gaza and international efforts to prevent Hamas from re-arming. For its part, Hamas wanted an end to the blockade on Gaza and targeted killings by Israel.
Israel has accepted the deal, according to a statement released from the office of Prime Minister Benjamin Netanyahu.
Netanyahu consulted with US President Barack Obama before agreeing to the ceasefire.
Netanyahu accepted Obama's "suggestion to give a chance to Egypt's proposal for a ceasefire and so give an opportunity to stabilise the situation and calm it before there will be need to apply greater force".
For the truce to hold, "the rocket attacks [from Gaza] must end and a broader calm must return," Mrs Clinton said.
"Now we have to focus on reaching a durable outcome that promotes regional stability and advances the security, dignity and legitimate aspirations of Palestinians and Israelis alike," she said.
Israel launched its current offensive a week ago with the killing of Hamas military leader Ahmed Jabari.
Militants fired more rockets at Israel, while Israel renewed its naval artillery bombardment of Gaza late on Wednesday.