The truce began to take hold as Israel launched a fifth day of airstrikes on Hamas targets in the Gaza Strip in reprisal for the Islamic militant group's rocket attacks on Israeli border towns. Other recent cease-fires between the factions have been short-lived but Hamas spokesman Fawzi Barhoum said he expected this one to stick because of Israel's military action.
"No one would accept to fight one another while the Israelis are shelling Gaza," he said.
The clashes between Hamas and Fatah gunmen loyal to Palestinian President Mahmoud Abbas have brought the two groups that nominally share power to the brink of civil war. More than 50 Palestinians have been killed in a week of infighting.
The overlapping violence from Israel's attacks on Hamas rocket operations has killed 23 other Palestinians in the past week.
On Saturday, Israeli Defense Minister Amir Peretz vowed to keep going after Hamas militants who would fire rockets at Israel, warning them to be "very afraid."
Still, Peretz said time was not ripe for a major Israeli ground offensive in Gaza.
Two Israeli airstrikes on Hamas targets killed three Palestinians and injured three. Five rockets from Gaza hit the Israeli border area Saturday, causing damage, but no injury.
The air attacks, backed by tank fire, have driven Hamas fighters out of their bases, prompting the militant group to accuse Israel and Fatah of colluding against it.
The Palestinian infighting broke out Sunday after Abbas stationed thousands of security forces on the streets of lawless Gaza City — a move Hamas interpreted as a provocation because it wasn't consulted.
Saturday's truce committed the battling factions to pull their fighters off the streets and exchange an unknown number of hostages.
Four previous cease-fire agreements collapsed earlier in the week.
A gunbattle erupted outside the home of a senior Fatah official in Gaza City as the cease-fire was reached, and security officials said several people were wounded.
And in another sign of the shaky nature of the truce, several hostages from both factions were released before an official exchange ceremony — but only after their captors shot them in the legs, both sides said.
Still, as word of the cease-fire spread, and enforcement teams went out on the streets, fighters began to comply — something they had not done with the previous truces. They also began knocking down roadblocks they had set up to identify rival fighters.
Truce enforcers from various Palestinian factions went from rooftop to rooftop, urging gunmen to leave. At one Gaza City building that had been the site of fierce fighting, Hamas fighters climbed down carrying a cache of rocket-propelled grenades, bags of explosives and AK-47 rifles.
Mervat, a resident who would only give her first name for fear of reprisal, said the fighting terrorized her 5-year old daughter who thought the conflict was with Israelis. The two never left home throughout the fighting.
"Hopefully it will stick this time. We are the only losers if this continues," she said.
She and other residents who had remained holed up at home throughout the fighting stepped out hesitantly to shop for groceries and other supplies.
Ribhi Barghouti held up a fistful of burnt American dollars. He said mortars fell in his apartment, destroying his furniture and burning up his wife's passport and $13,000 the couple had stashed away.
"I lost everything. ... It is impossible to tell what will happen in this place anymore," he said. He said he plans to return to his native West Bank as soon as his wife replaces her ID.
Some Gazans returned to their apartments, passing evacuating fighters on the way, only to decide the damage was too great for them to stay. They stuffed a few belongings into suitcases and left again.
The cease-fire was negotiated in a meeting at the Egyptian representative office in Gaza City and endorsed by Abbas and Hamas' exiled supreme leader, Khaled Mashaal, who conferred a rare three times by phone in the past few days. Mashaal lives in Syria.
"Both leaders ... made their calculations and realized that they can't gain this way," Palestinian Information Minister Mustafa Barghouti said.
Barghouti also said Saudi Arabia "made it clear they can't accept the failure" of the agreement Hamas and Fatah reached in Mecca in February to form a national unity government.
The violence with Israel, meanwhile, has destroyed a cease-fire Gaza militants reached with Israel nearly six months ago.
Israel launched its latest round of airstrikes on Hamas targets on Tuesday. The militant group, which refuses to recognize Israel's right to exist, has fired nearly 120 rockets at southern Israel since Tuesday, the military said.
Rocket squads should be "very afraid," because "it is our intention to act against Hamas," Peretz vowed in an interview with Israel Radio.
Asked whether Palestinian Prime Minister Ismail Haniyeh of Hamas and the head of Hamas' military wing, Ahmed Jaberi, could also be targets, Peretz said he would not rule out any action that "makes it clear to everyone that we don't intend to allow anyone to harm Israeli citizens."
At the same time, he said Israel would not embark on a major offensive in the Gaza Strip because it had other, unspecified tools in its arsenal to use against rocket-launchers, he said.
Peretz insisted Israel is not interfering in the internal Palestinian fighting. However, he said "we certainly would like the moderate forces to emerge with the upper hand," a reference to Fatah.