Israel and Hamas reportedly were observing an informal ceasefire, brokered by Egypt.
The ceasefire reportedly went into effect at midnight on Thursday morning, though a lone mortar shell was fired at southern Israel at about 9 a.m. Thursday, several hours after the unofficial truce was scheduled to begin.
"The contacts Cairo made resulted in a verbal promise by Hamas to calm the situation down and Israel said it was monitoring calm on the ground and would refrain from attacks unless it was subject to rocket fire from Gaza," an unnamed Palestinian official told reporters.
Israel denied that there was any agreement.
The cease-fire came after two days of rocket and mortar attacks by Palestinian terrorists in Gaza on Southern Israel, and Israeli strikes against rocket launching sites. Some 79 rockets hit Israel on Tuesday night and Wednesday.
At least five private homes were hit directly by the rockets and three foreign workers were injured, two seriously.
The Iron Dome missile defense system intercepted at least seven rockets aimed at Ashkelon.
Schools that were closed in much of southern Israel opened on Thursday, with the Home Front Command still recommending that residents living within 10 miles of Gaza remain near bomb shelters.
Hamas' military wing, the Al-Qassam Brigades, and the Popular Resistance Committees both have claimed responsibility for the rockets.
The escalation on Israel's southern border follows a border attack Tuesday on an Israeli patrol near the security fence with Gaza that seriously injured an Israeli soldier, who lost his arm in the explosion.
On Wednesday, Israeli Prime Minister Benjamin Netanyahu said that the radius for communities to be reinforced against rocket attacks would be expanded at a cost of about $65 million.
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