Updated 8.45 p.m.

Celebrations have broken out in the Gaza Strip as a truce came into force at 8 p.m. after a week of intensive bombing by Israel.

Fireworks and gunshots were fired in celebration as the Palestinians viewed the truce as a victory, having averted a ground invasion by Israel.

The truce was announced in Egypt this evening by Egyptian Foreign Minister Mohamed Kamel Amr in a joint news conference with U.S. Secretary of State Hillary Clinton. 

"These efforts ... have resulted in understandings to cease fire and restore calm and halt the bloodshed that the last period has seen," Amr said.

Israeli officials said Israel had agreed to a truce but will not lift its blockade of the Palestinian territory.

The ceasefire has ended eight days of fighting in Gaza that has killed more than 140 Palestinians and five Israelis.

VALLETTA DEMO

Meanwhile, a crowd of some 100 mostly Palestinian people held a demonstration in Valletta this evening, condemning the Israeli bombing of the Gaza strip. 

The demonstrators carried a large Palestinian flag and a number of placards as they walked down Republic Street, shouting slogans.

At one time the police asked the organisers to stop the blaring protest music. The music was stopped for a short while and then restarted.

In front of the law courts, those taking part also lit candles.

The Palestinian Ambassador said the Israeli actions had gone way beyond what could be described as self-defence, with whole families being obliterated in Gaza.

Israel says it launched the attacks to stop the firing of rockets from Gaza into southern Israel.