A cease-fire that halted eight days of deadly fighting between Israel and Hamas held firm Thursday as thousands of flag-waving Gaza residents poured into the streets, while in Israel the mood was more subdued.

Following a night of quiet skies after an Egyptian-brokered truce deal came into effect, Gaza's Hamas prime minister hailed the territory's multiple militant groups for respecting the cease-fire.

Israeli Prime Minister Benjamin Netanyahu said his government was “giving the truce a chance” but was prepared for the eventuality it could collapse. As a precaution, schools stayed closed in southern Israel, where nerves were on edge after a constant rain of rockets during the most serious Israeli-Palestinian fighting in four years.

With Israel and the Hamas militants who run the Gaza Strip having successfully maintained peace for a 24-hour period, border areas from Gaza will be opened, allowing people and goods to move in and out of the territory.

The Egyptian-brokered truce took effect at 1900 GMT Wednesday.

In the occupied West Bank, Israel's army said Thursday it arrested 55 suspected senior-level Palestinian militants it said were members of various armed factions.

Egypt is monitoring both sides for violations of the cease-fire agreement. The truce follows several days of intense aerial assaults on both sides of the border between Israel and the Gaza Strip, leaving more than 140 Palestinians and five Israelis dead.

Iranian President Mahmoud Ahmadinejad gave a qualified welcome Thursday to the deal.

The agreement was reached amid hours of intense diplomacy involving Clinton, as well as United Nations Secretary-General Ban Ki-moon.

Clinton called the truce “a critical moment for the region.”

“The people of this region deserve a chance to live free from fear and violence and today's agreement is a step in the right direction that we should build on.”

Clinton also praised Egypt's new government for assuming a key role in the effort and for pledging to work with Washington to ensure the cease-fire holds.

On Wednesday, a bomb blast on a bus in central Tel Aviv wounded at least 27 people, some seriously.

New rounds of missile and air attacks rained down on Gaza following the Tel Aviv attack. Palestinians medics Wednesday said at least 10 people were killed, including a young boy.

Israel and Hamas had traded rocket fire since an Israeli missile killed Hamas's military chief in Gaza City last week. Israel says the attack was a direct response to months of almost daily rocket fire into southern Israel from Gaza.