Israel and Palestinian leaders on Tuesday reached a Gaza ceasefire agreement which will start at 1600 GMT, the state's MENA news agency said citing two Egyptian officials.

Confirming the news, both Israeli and Palestinian officials said the deal had been reached under Egyptian mediation.

"Israel has accepted an Egyptian proposal for a complete and unlimited-in-time ceasefire," stated a a senior Israeli official on Tuesday,

"Israel accepted already the Egyptian proposal on July 15. We have always supported an unconditional, open-ended ceasefire," he said, speaking on condition of anonymity

Hamas spokesman Sami Abu Zuhri said in Gaza:"An agreement has been reached between the two sides and we are awaiting the announcement from Cairo to determine the zero hour for implementation."

A spokesman for the Popular Resistance Committees, one of the Gaza militant groups that has been firing rockets into Israel, said the announcement could be made within two hours.

Cairo's initiative, Palestinians officials said, called for an indefinite halt to seven weeks of hostilities, the immediate opening of Gaza's blockaded crossings with Israel and Egypt and a widening of the enclave's fishing zone in the Mediterranean.

Under a second stage that would begin a month later, Israel and the Palestinians would discuss the construction of a Gaza sea port and an Israeli release of Hamas prisoners in the occupied West Bank, the officials said.

Both Israel and Egypt view Hamas as a security threat and are demanding guarantees that weapons will not enter the economically crippled territory.

Increasing pressure on Palestinian militants to end their rocket strikes, Israel bombed more of Gaza's tallest structures on Tuesday, bringing down a 13-storey apartment and office tower and destroying most of a 16-floor residential building.

The strikes flattened the Basha Tower and wrecked the Italian Complex, after occupants were warned to get out, and no deaths were reported.

Declining to comment specifically on the attacks, the Israeli military said it had hit 15 "terror sites", including some in buildings that housed Hamas command and control centers.

Hamas, the dominant militant group in the Gaza Strip, accused Israel of an "unprecedented act of revenge against civilians" aimed at deterring Palestinians from supporting the Islamist movement.

Israel has now attacked three of Gaza's most prominent high-rise buildings since Saturday, when it destroyed the 13-storey Al Zafer Tower.

The strikes were preceded by non-explosive warning missiles that sent residents fleeing, but 20 people were wounded in the attack on the Italian Complex.

Six Palestinians were killed in other Israeli strikes on Tuesday, medical officials said. Israel's military said 70 rockets were fired from Gaza and that one damaged a house in the southern coastal town of Ashkelon, lightly wounding 10 people.

Palestinian health officials say 2,129 people, most of them civilians, including more than 490 children, have been killed in Gaza since July 8, when Israel launched an offensive with the declared aim of ending the rocket salvoes.

Sixty-four Israeli soldiers and four civilians in Israel have been killed.

Thousands of homes in the Gaza Strip have been destroyed or damaged in the conflict. The Palestinian Center for Human Rights said 540,000 people had been displaced in the territory where Palestinians, citing Israeli attacks that have hit schools and mosques, say no place is safe.

Israel has said Hamas bears responsibility for civilian casualties, because it operates among non-combatants. The group, it said, uses schools and mosques to store weapons and as launch sites for rockets.-Reuters