Israeli and Palestinian leaders have reached a tacit truce that could prevent a new war in the Gaza strip after five days of clashes.

 The agreement, brokered by Egypt, was made on Monday night, with both sides warning that they would resume fighting if attacked again.

 Ismail Haniyeh, prime minister of Gaza's Hamas government, praised the main armed factions in the occupied Palestinian territory for agreeing to the truce.

 "They showed a high sense of responsibility by saying they would respect calm should the Israeli occupation also abide by it," he said during an unannounced visit to a hospital to see wounded Palestinians.

 Three Palestinian fighters and four civilians have been killed and 40 others wounded by Israeli fire since Saturday.

 Eight Israeli civilians were injured by some of the 115 rockets fired from Gaza and four soldiers were wounded by the anti-tank missile that hit their jeep and fuelled the fighting.

 Benny Begin, one of the Israeli officials who took part in talks initiated by Binyamin Netanyahu, Israeli's prime Minister, said the flare-up had subsided but the conflict was far from resolved.

 "This round of firing appears to have ended and things must be looked at soberly without illusions for both sides," he said.

 Meanwhile, Netanyahu himself, issued a heavy warning to Hamas over the violence.

 "Whoever thinks they can harm the routine lives of southern residents without paying a very heavy price is mistaken," he said in a radio speech. "And I am responsible for us exacting this price at the most proper time".

 Egypt mediation

 An official involved in the Egyptian mediation confirmed both sides were ready to stop.

 "The message was clear and Israel too told Egypt they were not interested in escalation if rocket firing stopped. The situation now is calm for calm and I hope it does not deteriorate," the official told Reuters

 Israel struck three targets in the Gaza Strip in the early hours of Tuesday, including what the army said was a weapons depot and two rocket launch sites. There were no casualties.

 Only one Palestinian rocket strike was reported in Israel by 0800 GMT on Tuesday.

 Defense Minister Ehud Barak told reporters Israel was not prepared to forgive and forget following four days of violence.

 "The matter has definitely not ended and we will decide how and when to act at the time when there will be a need," he said.

 PHOTO CAPTION

 At least seven Palestinians have been killed and 40 wounded by Israeli airstrikes in the last five days [AFP].

Aljazeera