Israel agreed on Sunday night to a fragile ceasefire with militants in Gaza as Palestinian officials said the death toll in the latest round of fighting had risen to 41, including 15 children.
The two sides announced on Sunday evening that an Egypt-brokered ceasefire would begin at 11.30pm local time.
However, shortly before midnight there were reports of fresh rocket fire from Gaza, raising the prospect that the truce would not last through the night.
Israel continued to pummel the Palestinian enclave on Sunday with airstrikes, while Islamic Jihad retaliated with dozens of rockets, including a launch targeting Tel Aviv.
The Hamas-run ministry of health in Gaza announced on Sunday night that 41 Palestinians had been killed so far, including 15 children, and 300 people injured. There have been no significant injuries on the Israeli side.
The current round of fighting, the worst between Israel and Gaza since last May, began on Friday when Israel launched what it described as a "pre-emptive" round of airstrikes on Islamic Jihad commanders in Gaza.
Islamic Jihad had issued a series of threats against Israel last week following the arrest of one of its senior figures in the West Bank.
Israel has said that a stray rocket fired by militants in northern Gaza was responsible for an explosion near a mosque at the weekend that killed several children. The military published video footage of a failed rocket launch to support its claim. Islamic Jihad has not responded to the allegation while Hamas has blamed the attack on Israel.
Hamas has so far kept out of the latest fighting, but it has expressed solidarity with PIJ and may join at a later stage.
The PIJ responded to the air strikes on Gaza with almost 600 rockets in return, the Israeli military said, adding that their Iron Dome had intercepted 97 per cent of the projectiles fired.
Israel has kept the crossing points for the blockaded territory closed since Tuesday, leading to the only power plant in the Gaza Strip running out of fuel on Saturday afternoon.
Health authorities in Gaza are appealing for help from the international community as they try to treat the wounded amid severe fuel shortages that are leading to increased power cuts.
The Palestinian Health Authority warned on Sunday that there was only enough fuel to get through the next 48 hours before hospitals would have to shut off their generators and become unoperational.
Liz Truss, the Foreign Secretary, said in a statement that "the UK stands by Israel and its right to defend itself", but Francesca Albanese, the UN special rapporteur on occupied Palestine territories, condemned Israel's aggression as "illegal" and "irresponsible".
According to preliminary statistics released by authorities in Gaza, the Israeli attacks have damaged 650 housing units and rendered 30 uninhabitable. Palestinian rocket fire has also caused property damage in Israel.
Around two million people live in blockaded Gaza where unemployment levels are among the highest in the world, more than half of the population require food assistance and almost 80 per cent of the water is unfit for human consumption.
Air raid sirens were heard across Jerusalem on Sunday morning for the first time since last year's conflict with Hamas. The PIJ confirmed that it "fired rockets" at the city.
Yair Lapid, the prime minister of Israel, who launched the high stakes attack just three months before elections, has not provided evidence of the "imminent" attack that authorities believed was coming.
An Israeli military spokesman said last week that Palestinian anti-tank squads were seen moving on the border with Israel when asked what prompted the attack.
Some 20 PIJ members were arrested on Sunday night in sweeping raids across the West Bank, the Israeli army said. A further 19 were reported to have been arrested in the West Bank a day earlier.