The statement said the Israeli Security Cabinet unanimously agreed to the mutual deal "without any preconditions."
The announcement followed a Security Cabinet briefing in which military officials detailed "Israel's significant achievements" during the 11-day Operation Guardian of the Wall, "some of which are unprecedented," according to the statement.
However, the prime minister's office warned, "[t]he political leadership emphasizes that it is the reality on the ground that will determine the future of the operation."
As the 2 a.m. cease-fire approached, the Israeli military said Hamas continued firing rockets but as the deadline passed the skies went quiet, The Jerusalem Post reported.
Throughout Gaza, Palestinians took to the streets in celebration.
"I welcome the cease-fire between Gaza & Israel," Tor Wennesland, the United Nations special coordinator for the Middle East peace process, said in a statement shortly after the cease-fire went into effect. "I extend my deepest condolences to the victims of the violence and their loved ones."
"The work of building Palestine can start," he said.
U.N. Secretary-General Antonio Guterres also welcomed the stoppage to fighting but said that both sides now have the responsibility to start a "serious dialogue to address the root causes of the conflict."
The fighting erupted the night of May 10 as Hamas began firing rockets at Israel as tensions between Israelis and Palestinians turned bloody over the former's intention to forcibly displace Palestinian families from their East Jerusalem homes.
In response, Israel launched Operation Guardian of the Walls, hitting hundreds of Hamas targets in Gaza, a self-governing Palestinian territory along the eastern coast of the Mediterranean Sea, with airstrikes, leveling multi-story buildings and leaving rubble in the streets.
The Palestinian Ministry of Health said as of 6 p.m. Thursday, at least 232 Palestinians have been killed, including 65 children, with another 1,900 others wounded. The Israeli Foreign Ministry said two people were killed by Hamas rockets Wednesday, lifting its death toll to 12.
The Palestinian ministry has accused Israel of targeting densely populated residential areas to which Israel accuses Hamas of placing military targets near civilian areas to use them as human shields.
The Israeli military tallied some 4,340 rockets fired from Gaza at it, with 640 falling back into the Palestinian territory.
Less than two hours before the cease-fire was to go into effect, U.S. President Joe Biden said in a statement that he was told by Netanyahu that Israel agreed to stop fighting and that the Egyptians have informed the United States that so had Hamas.
Biden said he told Netanyahu that he will support the replenishment of Israel's Iron Dome system that the Israel Defense Forces said intercepted about 90% of the thousands of rockets Hamas fired at it since fighting began on May 10.
For Palestinians, he said the United States will work with the U.N. and other stakeholders "to provide rapid humanitarian assistance and to marshal international support for the people of Gaza" as well as support efforts to reconstruct Gaza as buildings and streets were destroyed in the Israel assault.
"I believe the Palestinians and Israelis equally deserve to live safely and securely and to enjoy equal measures of freedom, prosperity and democracy," he said, adding he believes the cease-fire is "a genuine opportunity to make progress, and I'm committed to working for it."
The comment from Biden followed growing criticism from abroad and at home -- including within his own Democratic Party -- for not taking a stronger stance on Israel as he repeatedly stated the United States respects Israel's right to defend itself.
On Wednesday, according to a White House readout of the call, Biden told Netanyahu that he expects "a significant de-escalation today on the path to a cease-fire." Shortly after, Netanyahu said he is "very much appreciative" of Biden's support for Israel's right to defend itself and that he is determined to continue Operation Guardian of the Walls until "calm and security" is restored.
Fighting Thursday continued as international partners brokered the cease-fire with the Israeli military stating it had hit some 30 rocket launching posts, among other targets, while Hamas fired some 300 rockets from Gaza throughout the day.
During the day, Netanyahu met with the foreign ministers of Slovakia, the Czech Republic and Germany, whom he thanked for their support for Israel while displaying the wing of an unmanned aerial vehicle shot down during the fighting he said came from Iran, stating they are behind Hamas' support.
"Iran not only supports completely the Islamic Jihad in Gaza, and gives them all the finances they also give weapons to Hamas as well as to Hezbollah and they provide the scaffolding on which these organizations really work," Netanyahu said.
On Wednesday, the leaders of France, Egypt and Jordan issued a joint statement expressing concern over the escalation of tensions and calling on both parties "to immediately agree on a cease-fire."
They said they will continue working with the U.N. Security Council and other international partners to make that happen.
The statement was issued in the wake of the council failing to produce a resolution during several meetings in the past week with China holding the United States responsible for blocking it.
"What U.S. does amid Palestine-Israel conflict is deeply disappointing," Chinese Foreign Ministry spokesman Lijian Zhao said in a statement. "UNSC is paralyzed due to U.S. veto, is this what U.S. calls rule-based international order?"
The fighting, the United Nations Office for Coordination of Humanitarian Affairs said, has internally displaced some 75,000 people since May 10, including 47,000 seeking shelter in U.N. schools across Gaza with an additional 28,700 staying with foster families.
"Until a cease-fire is reached, all parties must agree to a 'humanitarian pause,' to ensure access in to and out of Gaza for humanitarian staff and critical goods," the office said.
The U.N. Relief and Works Agency also announced Wednesday an appeal for $38 million to cover urgent humanitarian needs.
"A humanitarian truce is desperately needed to allow assistance to the people in Gaza including those having fled their homes," UNRWA Commissioner-General Philippe Lazzarini said in a statement.