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Israel and Hamas agree to Gaza cease-fire

Updated at 4 p.m. ET: Israel and Hamas agreed to a cease-fire Wednesday, ending eight days of fighting that killed more than 140 Palestinians and five Israelis.

“The United States welcomes the agreement today for the cease-fire in Gaza," U.S. Secretary of State Hillary Clinton said at a news conference alongside Egyptian Foreign Minister Mohamed Kamel Amr. "This is a critical moment for the region."

The cease-fire started at 9 p.m. Cairo time (2 p.m. ET). Hundreds took to the streets of Gaza City to celebrate the cease-fire, NBC's Ayman Mohyeldin reported. Celebratory gun fire erupted across the city, whose streets gradually filled with crowds waving Palestinian flags. Ululating women leaned out of windows and fireworks lit up the sky.

"Allahu akbar, (God is greatest), dear people of Gaza you won," blared mosque loudspeakers in the enclave as the truce took effect. "You have broken the arrogance of the Jews."

Both sides fought right up to 9 p.m., when hostilities were due to stop, with several explosions shaking Gaza City and rockets hitting the Israeli city of Beersheba.

If it holds, the truce will give 1.7 million Gazans respite from days of ferocious air strikes and halt rocket salvoes from militants that unnerved a million people in southern Israel and reached Tel Aviv and Jerusalem for the first time.

During the Cairo news conference, Clinton thanked Egypt's Islamist President Mohammed Morsi for his mediation efforts and pledged to work with partners in the region "to consolidate this progress, improve conditions for the people of Gaza, provide security for the people of Israel."

In Jerusalem, Israeli Prime Minister Benjamin Netanyahu confirmed the agreement, adding that he had spoken with President Barack Obama and had agreed to fight together against "weapons of terror."

"Israel cannot sit with its arms folded against its enemies," he said in a news conference.

Netanyahu paid tribute to U.S. diplomacy and Morsi's leadership, but also to Israel's resolve and the armed forces.

"I am proud to be your prime minister," he said.

According to the cease-fire agreement: Israel will stop attacks on Gaza by land, sea and air and stop incursions and targeted assassinations; Palestinian factions will stop hostilities from the Gaza Strip against Israel; Israel will ease the movement of people and goods at border-crossing areas.

Egypt is the "sponsor" of the cease-fire agreement.

In comments following the cease-fire announcement, Israeli Defense Minister Ehud Barak said the army had been effective, achieving maximum destruction to Hamas with minimum loss of civilian life.

Barak added that the Iron Dome defense system was "an exceptional success," knocking down 500 incoming missiles.

The exiled leader of Hamas said that if Israel complied with the cease-fire, Palestinians would as well but they would respond to any Israeli violation.

"If Israel complies, we are compliant. If it does not comply, our hands are on the trigger," Khaled Meshaal said in Cairo. 

Meshaal also thanked Egypt for helping mediate the Gaza ceasefire and praised Iran for providing Gazans with financing and arms.

"We have come out of this battle with our heads up high," he said, adding that Israel had been defeated and failed in its "adventure."

"It failed, praise be to God," Meshaal said of Israel's eight days of attacks on Gaza, which the Jewish state said were meant to stop increasing Palestinian rocket fire from the enclave targeting its cities and towns.

Hours before the cease-fire announcement, an explosion on a bus in Tel Aviv injured 19 people, three of them seriously, an official told NBC News.

Tel Aviv police spokesman Micky Rosenfeld told the U.K.'s Sky News that the bus blast took place in the heart of the city and that the surrounding area had been cordoned off as police searched for suspects.

"This was a terrorist attack," Ofir Gendelman, a spokesman for Netanyahu, told Reuters.

The White House condemned the attack as "outrageous." In a statement, it reaffirmed the United States' "unshakable commitment to Israel's security and our deep friendship and solidarity with the Israeli people."

Hamas spokesman Sami Abu Zuhri praised the bombing, but stopped short of claiming responsibility.

"Hamas blesses the attack in Tel Aviv and sees it as a natural response to the Israeli Gaza," he told Reuters. "Palestinian factions will resort to all means in order to protect our Palestinian civilians in the absence of a world effort to stop the Israeli aggression."

More photos: Explosion hits bus in Tel Aviv

Sweet cakes were handed out in celebration of the blast in Gaza's main hospital, which has been inundated with wounded from the round-the-clock Israeli bombing and shelling, Reuters reported. Celebratory gunfire rang out in Gaza City when local radio stations reported the news.

The last time Israel's commercial capital was hit by a serious bomb blast was in April 2006, when a Palestinian suicide bomber killed 11 people at a sandwich stand near the city's old central bus station.

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Like most Western powers, Washington shuns Hamas as an obstacle to peace and has blamed it for the Gaza conflagration.

A U.N. Security Council statement condemning the conflict was blocked on Tuesday by the United States, which complained that it "failed to address the root cause" -- the Palestinian rockets.

Meanwhile, the head of Iran's powerful Revolutionary Guard has disclosed his country has given fighters in Gaza the ability to produce longer-range missiles on their own, without direct shipments. The comments, by Gen. Mohammad Ali Jafari, quoted by the semi-official ISNA news agency, offer some of the clearest insights on Iran's weapons support for Hamas.

Previously, Iran denied it directly supplied Hamas with the Fajr-5 rockets being fired at Israel in recent days.

NBC's Lawahez Jabari, Ian Johnston and Andy Eckardt, Reuters and The Associated Press contributed to this report.

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