The truce started at 8.00 a.m., just hours after 14 more Palestinians were killed by Israeli airstrikes in Gaza, BBC reported.
Both Israeli and Hamas leader confirmed that they had agreed to the ceasefire proposal brokered by the US and UN.
"During this time the forces on the ground will remain in place," US Secretary of State John Kerry and UN Secretary-General Ban Ki-moon said in the joint statement.
"We urge all parties to fully abide by their commitments during the ceasefire."
"This ceasefire is critical to giving innocent civilians a much-needed reprieve from violence," the statement added.
During the ceasefire period, civilians in Gaza would receive "urgently needed humanitarian relief, and the opportunity to carry out vital functions, including burying the dead, taking care of the injured and re-stocking of food supplies".
Israel and Palestinian delegations, in the meantime, will travel to Cairo for separate negotiations to reach a more durable ceasefire, the statement said.
A senior US State Department official said talks could start as early as Friday, depending on how long it takes the parties to reach Cairo.
Hours before the ceasefire was announced, Israeli Prime Minister Benjamin Netanyahu said he would not accept any truce that stopped Israel from completing the destruction of tunnels dug under the border by Palestinian fighters.
According to Palestinian health officials, at least 1,450 Palestinians have died, mostly civilians, since the Israeli offensive began July 8.
In Israel, 61 soldiers and three civilians were also killed.