Reports from the Middle East say three main Palestinian groups, including the militant Hamas and Islamic Jihad, have agreed to a three-month halt in attacks on Israelis. But violence flared again with four Palestinians killed in two separate incidents.
Media reports said a ceasefire document was signed in Damascus by top Hamas leader Khaled Mashal and Islamic Jihad leader Ramadan Shalah.
Palestinian leader Marwan Barghouti is said to have signed on behalf of the main Palestinian faction, Fatah.
News that an agreement had been reached came as Israeli helicopters fired three missiles at two cars near the southern Gaza city of Khan Younis, killing a 20-year-old Palestinian woman and a man.
The Israeli military said the attack was aimed at Hamas militants who were on their way to attack a Jewish settlement in the Gaza Strip.
Reports said 17 people were wounded in the strike.
Israel has frequently targeted Palestinian militants in Gaza, including an attempt to assassinate Hamas leader Abdel Aziz Rantisi two weeks ago.
In a separate incident earlier, Israeli troops killed two Hamas militants in a gun battle at an Israeli military checkpoint near the Gaza Strip town of Beit Hanoun.
In exchange for a ceasefire, the Palestinian militants have demanded an end to Israel's targeted killings, an end to incursion into Palestinian areas and the release of Palestinian prisoners.
The ceasefire agreement is the culmination of weeks of efforts by Palestinian Prime Minister Mahmoud Abbas and by Egypt, which has played a key role in trying to end the violence in order to give the so-called road map peace plan a chance.
There is still no word on when a formal announcement of the ceasefire will be made or if the latest violence might derail the effort.