Though neither Israeli Prime Minister Ariel Sharon nor Palestinian leader Yasser Arafat were enthusiastic about the deal, both men appeared willing to compromise in order to end the nine-month wave of violence that has claimed more than 600 lives.
Details of the plan have not been released, and continuing negotiations to iron out specifics were shrouded in secrecy today. Both sides said the next 48 hours would be crucial in determining whether the cease-fire would hold.
However, officials on both sides told reporters the plan called on Palestinians to re-arrest militants suspected of planning attacks on Israel and on Israelis to end a blockade of Palestinian towns that has cut off trade and employment routes and crushed the local economy.
An initial cooling off period would be followed by more talks on how to implement the peace plan put forward by a commission headed by former U.S. Senator George Mitchell.
That plan, released last month, called for an immediate cease-fire followed by a freeze on expansion of Israeli settlements and a gradual withdrawal of Israeli troops to positions held before the current uprising began in October. Palestinians must collect illegal arms including mortar bombs, close down bomb factories and prevent illegal arms smuggling.
However, the militant Islamic organization Hamas said on Wednesday it would not abide by the ceasefire and would continue its fight against Israel.
A fragile cease-fire took hold 11 days ago, when Sharon, despite intense pressure to strike back, decided Israel would not retaliate for a suicide bomb attack that killed 20 young people at a Tel Aviv night club.