And, in fact, a Palestinian source told the Associated Press the militants have accepted the truce, and it will be announced formally on Sunday.
In the two-hour battle, soldiers blew up a house and fired more than a dozen tank shells, as combat helicopters fired machine guns toward groups of dozens of gunmen. The target of the raid, Adnan al-Ghoul, also known as "The Engineer," was not present.
The Israeli army says the fourth person killed was a Palestinian gunman in an adjacent house.
It appeared the raid would not scuttle the truce announcement. Hamas' reaction was relatively muted, and Palestinian Prime Minister Mahmoud Abbas said that "all the factions are studying how to finalize the agreement."
Even while peace talks continue, Palestinian suicide bombers have been trying to infiltrate Israel from the West Bank. Three bombers carrying explosives were intercepted and killed by Israeli security forces over the past two days.
Also Friday, Israeli-Palestinian negotiations on the terms of an Israeli troop pullback in the Gaza Strip and the West Bank town of Bethlehem — in line with a U.S.-backed peace plan — yielded "real progress" Friday, a Palestinian official said.
Negotiators resolved the key sticking point, control over the main highway in Gaza. Another meeting could take place today and an agreement is expected soon. An Israeli pullout would be a significant step toward implementation of the U.S.-backed "road map" to peace, which calls on Israel to return to positions it held before the outbreak of fighting in September 2000. The plan also requires Palestinian security forces to dismantle militias, but Palestinian leaders have said they will not launch a crackdown.
However, some Israeli officials are describing the cease-fire as "poison covered in honey." Parliament member Yuval Shteinitz of the ruling Likud party calls it a ploy by the terrorist groups.
"They will use the cease-fire and partial Israeli withdrawal in order to recover and to rebuild, and to prepare the next round of violence," he said.
Condoleezza Rice, the U.S. national security adviser, is to arrive in the region on Saturday, as President Bush's personal envoy, to talk to the Palestinian and Israeli prime ministers about the plan.
En route to the Middle East, Rice called on the European Union to outlaw the political wing of Hamas to dry up the flow of donations to the group, which has killed hundreds of Israelis in bombings and shootings.
"A plan for a truce ... will be announced along with other Palestinian factions at the right time," Mahmoud Zahar, a Hamas leader, told Lebanon's Al Hayat-LBC satellite television from Gaza. "Until this happens, the resistance and confrontation will continue."
Hamas' military wing issued a statement blaming the United States for the Israeli strikes, but refrained for the first time from making customary threats of more attacks against Israel.
The Damascus-based leaders of the groups, Khaled Mashal of Hamas and Ramadan Shalah of Islamic Jihad, had agreed to a suspension of attacks earlier this week, but a formal announcement has been delayed until the weekend to add final touches.
Israel has shrugged off the emerging truce as an internal Palestinian matter, and has said the hunt for militants would not cease. "Such operations will continue until we have a cease-fire," said Avi Pazner, an Israeli government spokesman. "If and when the cease-fire will be put into effect, then we will look again at that kind of (operation)."
Other Israeli officials have said that even if a truce is declared, Israel would still go after militants it felt were threatening its security. Israeli Prime Minister Ariel Sharon said Thursday that Palestinians must understand that the "long arm of the Israeli defense forces can hit terrorists anywhere, anytime."
In Friday's raid, undercover troops surrounded the home of Omran al-Ghoul, a brother of the Hamas bombmaker and himself an operative of the group, in the village of Mujarkha in the central Gaza Strip.
A gunbattle erupted between soldiers and dozens of armed Palestinians, and Omran al-Ghoul and the bombmaker's son, Mohammed, 19, were killed. In a separate clash nearby, a bystander and another gunmen were killed, Palestinian hospital officials said. Palestinian witnesses said they heard 17 tank shells being shot during the battles, and said helicopters fired incessantly.
Adnan al-Ghoul, 42, is the chief bombmaker of Hamas, and has overseen the construction of homemade Qassam rockets the group has been firing at nearby Jewish settlements and Israeli border communities. He has been wanted for more than a decade by both by Israel and the Palestinian Authority. Israel has repeatedly tried to kill him in recent years, but failed.
The agreement for a three-month truce was worked out between Marwan Barghouti, West Bank leader of Yasser Arafat's Fatah movement, and heads of Hamas and Islamic Jihad in Damascus. Mashal, the Hamas leader, then drafted the deal based on his discussions with Barghouti.
Barghouti is in an Israeli prison, held while on trial for alleged complicity in Palestinian attacks that killed 26 Israelis.
Negotiators said the truce would halt attacks by the three groups for three months and would apply to the West Bank and Gaza as well as Israel, a key Israeli demand. In exchange they demanded an end to killings of militants and military strikes, and the release of prisoners; however, these were not made conditions for beginning the truce.