Egypt-brokered deal comes after Israeli fighter jets attack 80 sites in Gaza in retaliation for rockets fired at Israel.
The Palestinian group Islamic Jihad says it has agreed to stop firing rockets towards Israel after talks with an Egyptian delegation.
The announcement on Saturday came hours after Israel launched air raids hitting more than 80 locations in the besieged Gaza Strip after it said rockets were fired from there into southern Israel.
"We announce a ceasefire with Israel after Egyptian contacts with us," Dawoud Shihab, Islamic Jihad spokesperson, told Anadolu Agency.
He added the group "will be committed to the deal as long as Israel is committed to".
Khaled al-Batsh, a top official of the group, told The Associated Press news agency on Saturday that it was grateful to Egypt for brokering the agreement "to restore calm to the Gaza Strip".
"The Egyptians thankfully intervened and exerted huge efforts between the resistance [factions] in Gaza and the Zionist [Israeli] occupation," Batsh said.
"The Egyptian efforts led to understandings to restore calm to the Gaza Strip. We appreciate the Egyptian endeavour and hope for all kinds of [Israeli] aggression to stop."
Israel did not immediately respond, and past ceasefires in the conflict have not always stuck.
Egyptian mediators have been attempting to negotiate a truce between Hamas, which rules the Gaza Strip, and Israel.
The Islamic Jihad movement, which was founded in the late 1970s, is much smaller than Hamas and maintains that Palestine, with its borders marked from the Jordan river to the Mediterranean sea, is Islamic land and it is religiously prohibited to compromise or surrender any of it.
Its military wing, the Al-Quds Brigades, became active during the 1987 Intifada by launching operations against Israeli military and non-military targets.
Earlier on Saturday, an Israeli military spokesperson said 34 rockets had been fired at Israel throughout the night.
Israel's Iron Dome rocket-defence system reportedly intercepted 13 rockets, two of which landed in Gaza and the remainder fell in open spaces in southern Israel.
In response, the Israeli military said it struck about 80 sites across Gaza by early Saturday morning, including a security headquarters building.
Among the targets was Hamas' new headquarters for the General Security Services, the military said.
Health officials in Gaza said nine Palestinians were wounded in one of the Israeli attacks and a hospital was badly damaged.
No Israelis were reported injured from the rockets.
Hamas has disavowed the recent rocket attacks and blamed fringe groups bent on sabotaging United Nations and Egyptian efforts to broker a long-term truce.
But Israel has said it holds Hamas responsible for any rocket fire regardless of who launched it.
Hamas has been pushing for the end of an 11-year siege on Gaza, imposed by Israel and Egypt, that has trapped more than two million Palestinians, and left residents with limited access to water and electricity.