Ceasefire in Gaza announced

Gaza: Palestinian militants will cease firing rockets at Israel from Gaza on Sunday, President Mahmoud Abbas told Israeli Prime Minister Ehud Olmert, who pledged in return to halt attacks in the territory if the salvoes stopped.

Several militant groups met on Saturday with Haniya and agreed to halt attacks from Gaza if Israel ceased its military activities there.

The agreement could help Haniya and Abbas finalise negotiations on forming a unity government of technocrats that Palestinians hope can lead to the lifting of Western sanctions imposed after Hamas came to power in a January election.

An end to now-daily rocket attacks on southern Israel could also ease political pressure on Olmert at home, where his popularity has flagged after an indecisive war against Hezbollah guerrillas in Lebanon last summer that ended inconclusively.

On Friday, Israel had rejected a Palestinian ceasefire offer, with government spokeswoman Miri Eisin describing it as a "partial ceasefire" impossible to take seriously.

Earlier in the day, militant factions had denied reaching a cease-fire agreement. But after it was officially announced, they acknowledged the accord.

"President Abbas and Prime Minister Esmail Haniya agreed with all factions and resistance groups on calm, including the stopping of rocket fire, starting from 6 a.m. (0400 GMT) on Sunday," Abbas spokesman Nabil Abu Rdainah said.

The ceasefire, which Israeli and Palestinian officials said did not apply to the West Bank, where violence has not been intense recently, could pave the way for a summit between Abbas and Olmert on ways to restart the Middle East peace process.

Abbas, who has long sought a cessation of rocket attacks on Israel, informed Olmert of the dramatic development in a telephone call late on Saturday following a meeting between the president and Haniyeh, a leader of the governing Hamas group.

"Abbas told the prime minister that all the Palestinian factions are committed to the agreement," said Olmert spokeswoman Miri Eisin.

"Abbas asked in response that Israel stop all military operations in the Gaza Strip and withdraw all the forces," she said. "The prime minister ... told Abbas that Israel would respond favourably, as Israel was operating in the Gaza Strip in response to the violence. With the end of violence, Israel would be happy to withdraw its troops."

Earlier in the week, Israel threatened to step up the military offensive it began in Gaza in June after militants who tunnelled across the border abducted an Israeli soldier, who is still being held.

More than 400 Palestinians, about half of them militants, have been killed in Israeli strikes over the six months, Palestinian hospital officials say. Three Israelis also have been killed.

"(Olmert) expressed his hope that the end of violence would bring stability to both sides," Eisin said.

"The two agreed to continue the dialogue ... and agree to talk again soon (on) the ideas and steps towards ending the violence, also in the West Bank," she said.

On Saturday, Hamas leader Khalid Mesha'al said in Cairo his group was willing to give peace negotiations with Israel six months to reach an agreement for a Palestinian state in Gaza and the West Bank, but threatened a new armed uprising if the talks failed.

The double-edged comments were his strongest confirmation that the Islamic militant group would allow Abbas to try to negotiate with Israel. But it was also the first time he has set a deadline with an explicit threat of a new uprising.

In violence on Saturday, an Israeli aircraft attacked a car carrying Hamas militants in Gaza City, killing one of the men and wounding four, the movement said. The Israeli military said the Hamas squad was involved in weapons production.

A Hamas militant and a policeman also were killed in Israeli tank shelling near Gaza City, ambulance workers said.