Since Friday, Israeli forces pounded Palestinian targets through the weekend, triggering longer-range rocket attacks against its cities.
The truce would come into effect half an hour before midnight local time both Islamic Jihad and the Israeli government said in separate statements.
The latest clashes have echoed preludes to previous Gaza wars, though they have been relatively contained as Hamas, the governing Islamist group in the Gaza Strip and a more powerful force than Iranian-backed Islamic Jihad, has so far stayed out.
Gaza officials said 43 Palestinians, almost half of them civilians and including children, had so far been killed. The rockets have threatened much of southern Israel and sent residents in cities including Tel Aviv and Ashkelon to shelters.
Israel launched what it called pre-emptive strikes on Friday against what it anticipated would be an Islamic Jihad attack meant to avenge the arrest of a leader of the group, Bassam al-Saadi, in the occupied West Bank.
In response, Islamic Jihad fired hundreds of rockets at Israel. The group said the truce would involve al-Saadi’s release. Israeli officials did not immediately comment.
On Sunday, Islamic Jihad extended its range to fire toward Jerusalem in what it described as retaliation for the overnight killing of its southern Gaza commander by Israel – the second such senior officer it has lost in the fighting.
Israel said its Iron Dome interceptor, whose success rate the army put at 97 per cent, shot down the rockets just west of the city.
Palestinians dazed by another surge of bloodshed – after outbreaks of war in 2008-09, 2012, 2014 and last year – picked through the ruins of houses to salvage furniture or documents.
“Who wants a war? No one. But we also don’t like to keep silent when women, children and leaders are killed,” said a Gaza taxi driver who identified himself only as Abu Mohammad. “An eye for an eye.”