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 During the ceasefire, air raid sirens went off briefly in southern
Israel and the military said three mortars landed in open areas, but
the truce appeared to be generally holding. No group in Gaza claimed
responsibility for the mortar fire and there were no reports of
Israeli retaliation.
Hours before the truce began, about a dozen Palestinian fighters
tunnelled under the border, emerging near an Israeli community. At
least one was killed when Israeli aircraft bombed the group, the
military said.
The break in 10 days of fighting was requested by the United Nations
to allow residents of the Gaza strip, ruled by the Hamas group
viewed by Israel as terrorists, to gather supplies and repair damage
to infrastructure such as water mains and power.
 Gaza health officials say at least 224 Palestinians, mostly
civilians, have been killed. In Israel, one civilian has been killed
by fire from Gaza, where the Israeli military says more than 1,300
rockets have been launched into the Jewish state.
The strikes have made a race to shelters a routine for hundreds of
thousands of people.
Israel's military, which government officials said was poised to
expand its air and naval bombardments into possible ground
operations, said it would respond "firmly and decisively" if
militants launched attacks during the truce.
In Gaza City, hundreds of Palestinian lined up outside banks to
collect salaries paid directly into their accounts, while others
went food shopping. Gaza roads almost deserted over days of conflict
were filled again with traffic.
"We are here to get paid. Thank God for the calm and we hope it
lasts," said Zakaria Ahmed, 35. "We hope Egypt brings a good truce,
we hope the killing will stop and (Gaza's border) crossings will
open."
 There was also relief in Israel. In the southern Israeli town of
Ashkelon, which has been under constant rocket fire, families
strolled through the streets after remaining at home for the past
week.
"They finally decided, for at least a short time, on a ceasefire ...
so we can have some fun now during summer break," youngster Netanel
Moshe Popesmedo said on Channel 10 television.
After the early morning clash over the tunnel, and before the
five-hour ceasefire began, sirens sounded across Israel, including
in the Tel Aviv area, the country's heartland, warning of a heavy
barrage of incoming rockets.
The military said at least one rocket was intercepted by the Iron
Dome anti-missile system and another fell in a town near Tel Aviv.
There were no reports of casualties.
Also before the pause in fighting, an Israeli aircraft bombed a
house in Rafah in southern Gaza, killing three people and wounded
several others, medical officials said.
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CEASEFIRE EFFORTS
President Barack Obama said on Wednesday he supported Egyptian
efforts to agree a ceasefire that would end the worst flareup of
Israeli-Palestinian hostilities in two years. U.S. officials would
use their diplomatic resources over the next 24 hours to pursue
closing a deal, he said.
Egypt had proposed a permanent ceasefire plan on Tuesday, which
Israel accepted; but Hamas, saying its terms had been ignored,
rejected it.
Israeli media reports said Egypt was continuing its efforts for a
more lasting truce and that senior Israeli officials would hold
talks in Cairo on Thursday on a ceasefire. A spokesman for Prime
Minister Benjamin Netanyahu declined to comment.
Hamas is deemed a terrorist group by the United States and European
Union over its refusal to recognise Israel, renounce violence and
accept interim Israeli-Palestinian peace deals.
Hamas wants Israel and Egypt, whose military-backed government is at
odds with the Islamist group, to end border restrictions that have
deepened economic hardship among Gaza's 1.8 million populace and
caused a cash crunch in the movement, which has been unable to pay
its employees for months.
On Wednesday, an Israeli gunboat off Gaza's Mediterranean coast
shelled a beach, killing four boys - two aged 10 and the others 9
and 11 - from one family and critically wounding another youngster,
witnesses and Ashraf al-Qidra of the Gaza Health Ministry said.
The Israeli military said the reported civilian casualties were
unintended and tragic and it was investigating what happened. "Based
on preliminary results, the target of this strike was Hamas
terrorist operatives," it said in a statement.
The current conflict was largely triggered by the killing of three
Israeli teens in the occupied West Bank last month and the death on
July 2 of a Palestinian youth in a suspected revenge murder.
Israel indicted on Thursday three Israelis suspected of having
killed the 16-year-old Palestinian in Jerusalem.
(Additional reporting by Dan Williams in Jerusalem, Writing by Ari
Rabinovitch, Editing by Jeffrey Heller and Ralph Boulton)
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