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Israel's military said it would hold fire starting at 8am (local time) but would continue searching for tunnels used by militants. A spokesman for the Islamist group Hamas, which is dominant in the Gaza Strip, said all Palestinian factions would abide by the brief truce.
Fighting continued overnight as US Secretary of State John Kerry, on a visit to the region, has been spearheading international efforts to end 19 days of fighting.
Gaza officials said five people were killed in Israeli air strikes, bringing the Palestinian death toll to 865, most of them civilians.
Earlier, militants fired a barrage of rockets out of Gaza, triggering sirens across much of southern and central Israel. No injuries were reported, with the Iron Dome interceptor system knocking out many of the missiles.
Israel on Friday rejected international proposals for a more permanent ceasefire, a government source said, but Kerry, speaking in Cairo, said no formal proposals had yet been put forward.
The top U.S. diplomat said there were still disagreements on the terminology, but he was confident there was a framework that would ultimately succeed and that "serious progress" had been made, although there was more work to do.
Truce efforts will continue in Paris on Saturday when France hosts diplomats from the United States, Britain, Germany, Italy, the European Union, Turkey and Qatar, a French diplomatic source said.
Hamas wants an end to an Israeli-Egyptian blockade of Gaza before agreeing to halt hostilities. Israeli officials said any cease-fire must allow the military to carry on hunting down Hamas's tunnel network that criss-crosses the Gaza border.
Israel said three more of its soldiers were killed in Gaza on Friday, bringing the army death toll to 35, as troops battled militants in the north, east and south of Gaza - a tiny Mediterranean enclave that is home to 1.8 million Palestinians.
It also announced that a soldier unaccounted for after an ambush in Gaza six days ago was definitely dead, although his body had not been recovered. Hamas said on Sunday it had captured the man but did not release a photograph of him.
Three civilians have also been killed in Israel by rockets from Gaza - the kind of attack that surged last month amid Hamas's anger at a crackdown on its activists in the West Bank, prompting the July 8 launch of the Israeli offensive.
The Gaza turmoil has stoked tensions in the nearby occupied West Bank, where US-backed Palestinian President Mahmoud Abbas governs in uneasy coordination with Israel.
Medics said eight Palestinians were killed in separate incidents near the cities of Nablus and Hebron on Friday, including one shooting that witnesses blamed on an apparent Jewish settler.
On Thursday night, 10,000 demonstrators marched in solidarity with Gaza near the Palestinian administrative capital Ramallah - a scale recalling mass revolts of the past.
Protesters surged against an Israeli army checkpoint, throwing rocks and Molotov cocktails, and Palestinian medics said one was shot dead and 200 wounded when troops opened fire.
Abbas's Palestine Liberation Organization called for more demonstrations in the West Bank and said it was at the same time working to secure a cease-fire deal.