Israel and Palestinian Islamic Jihad (PIJ) militants in the Gaza Strip have agreed a ceasefire from 19:00 GMT on Saturday to end five days of fighting, Palestinian sources have told the BBC.
The sources cited negotiations being brokered by Egypt. Israel and the PIJ are yet to comment on the issue.
On Tuesday, Israel launched air strikes on Gaza, saying it was targeting PIJ commanders who had planned attacks.
PIJ responded by firing a barrage of rockets at Israeli cities.
At least 33 Palestinians in the Gaza have been killed, about half of them civilians, since Tuesday, the Palestinian health ministry there says. Another 147 people have been wounded.
Six senior leaders of the militant group have been killed.
One Israeli civilian and one Palestinian man who was working in southern Israel have been killed by Palestinian rocket fire in the same period, Israel’s Magen David Adom ambulance service says.
No details of the reported ceasefire have been released so far.
A Palestinian source told the BBC that the new agreement included a commitment by Israel to stop so-called targeted assassinations.
Israel has been demanding a complete halt to rocket fire by PIJ at its civilians.