Israel and Palestinian militants have unleashed salvos of fire for a fifth day, with the Islamic Jihad militant group launching dozens more rockets and the Israeli military pounding targets inside the Gaza Strip.
But late on Saturday, a state-run Egyptian TV channel said a ceasefire would take effect.
The Al-Qahera satellite channel said Egypt had brokered a ceasefire and it would go into effect at 10pm (1900 GMT).
Egypt often serves as a broker between the warring sides.
The signs of progress came as fighting continued.
Last week, another Egyptian effort to forge a truce unravelled.
Earlier on Saturday, shrapnel from a Palestinian rocket that slammed into an agricultural community in Israel’s southern Negev desert killed a Palestinian labourer who had been working inside Israel, Israeli defence officials said.
A second Palestinian labourer was badly wounded.
In a reminder of the combustible situation in the occupied West Bank, the Israeli military raided the Balata refugee camp near the northern city of Nablus, sparking a firefight that killed two Palestinians.
The Palestinian Health Ministry identified the two as 32-year-old Said Mesha and 19-year-old Adnan Araj.
In a separate incident near the northern city of Jenin, Israeli police said they shot and killed a suspected Palestinian assailant who ran towards soldiers wielding a knife.
Meanwhile, hopes for an imminent ceasefire between Israel and the Palestinian Islamic Jihad were fading as the Israeli military on Saturday bombed an apartment belonging to Islamic Jihad commander Mohammed Abu Al Atta, among other targets including rocket launchers, it said.
Islamic Jihad militants fired a barrage of rockets towards southern Israel, where tens of thousands of Israelis were instructed to remain close to safe rooms and bomb shelters.
Hundreds of residents near the border were evacuated to hotels further north.
Islamic Jihad promised a further onslaught.
“As assassinations and the bombing of apartments and safe houses continue, the Palestinian resistance will renew its rocket fire … to emphasise the continuation of the confrontation,” the group said.
Mortar shells fired by Palestinian militants crashed into the Erez crossing between Gaza and Israel, the Israeli civil defence body said, sharing footage of a fiery explosion at the main passageway into Israel.
Israeli officials told media that Egyptian-led efforts to broker a ceasefire were still under way but that Israel has ruled out the conditions presented by Islamic Jihad in the talks.
If the rocket fire continues from Gaza, Israeli officials told local media, “the strikes (on Gaza) will continue and intensify”.
The hostilities erupted on Tuesday when Israel killed three senior Islamic Jihad commanders who it said were responsible for firing rockets towards the country last week.
At least 10 civilians, including women, young children and uninvolved neighbours, were killed in the initial strikes, which drew regional condemnation.
Over the past few days, Israel has conducted even more air strikes, killing other senior Islamic Jihad commanders and destroying their command centres and rocket-launching sites.
On Friday, Israel killed Iyad al-Hassani, an Islamic Jihad commander who had replaced a leader of the group’s military operations killed in a Tuesday air strike.
The Palestinian Health Ministry has reported 33 Palestinians killed – six of them children – and at least 147 wounded.
Islamic Jihad has retaliated by firing rockets towards southern and central Israel. On Friday, the group escalated its assaults and fired rockets towards Jerusalem, setting off air raid sirens in Israeli settlements south of the contested capital.
Hamas, the larger militant group that has controlled Gaza since seizing power in 2007, has praised Islamic Jihad’s strikes but remained on the sidelines, according to Israeli military officials, limiting the scope of the conflict.
As the de facto government held responsible for the abysmal conditions in the blockaded Gaza Strip, Hamas has recently tried to keep a lid on its conflict with Israel. Islamic Jihad, a more ideological and unruly militant group, has taken the lead in the past few rounds of fighting with Israel.
On Saturday, the deadly Israeli raid into the Balata refugee camp turned the focus of the conflict back to the long-simmering West Bank. Residents said Israeli forces used shoulder-fired rockets to besiege a militant hideout, sharing footage of a large explosion and smoke billowing from the crowded camp.
The two Palestinians killed were not targets of the arrest raid, witnesses said, but among the crowds of protesters throwing stones and explosives at Israeli troops.
Israeli-Palestinian fighting has surged in the West Bank under Israel’s most right-wing government in history.
Since the start of the year, 111 Palestinians have been killed in the occupied territory, at least half of them affiliated with militant groups, according to a tally by the Associated Press — the highest death toll in two decades. In that time, 20 people have been killed in Palestinian attacks on Israelis.