The deal, mediated by the United States, offered a glimmer of hope in a conflict that has taken an immense human toll.

Israel and Hamas have agreed a Gaza ceasefire and hostage deal following meetings with Qatar's prime minister, a source briefed on the talks has told the BBC. There was no confirmation from the Israeli government or Hamas, but a Hamas official earlier told the BBC it had approved a draft from Qatari, US and Egyptian mediators.

Israeli Prime Minister Benjamin Netanyahu’s office alleged that Hamas had backed out on parts of a Gaza ceasefire and hostage deal agreed Wednesday, potentially delaying a truce between the two sides that was set to go into effect on Sunday—a day before President-elect Donald Trump takes office.

After intense negotiations, Israel and Hamas have reached a deal that would see a ceasefire and the exchange of hostages in Gaza for Palestinian prisoners.

Israel intensified strikes on Gaza hours after a ceasefire and hostage release deal was announced, residents and authorities in the Palestinian enclave said, as mediators sought to quell fighting ahead of the truce's start on Sunday.

An agreement offers Gazans at least some respite, and for Israelis it means the release of hostages. But the deal’s ambiguity leaves open the possibility that fighting could resume within weeks.

A ceasefire in the war in Gaza should be positive for Israel's under-pressure credit rating, Fitch's top sovereign rating analyst said on Thursday.