A cease-fire that halted eight days of deadly fighting between Israel and Hamas held firm on 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 went into effect late Wednesday, 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 its possible collapse. As a precaution, schools remained 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.

Meanwhile, Israeli officials said those responsible for the bombing of a rush-hour bus in Tel Aviv on Wednesday have been arrested. The blast took place hours before the truce took effect. More than 20 people were wounded.

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 has given a tentative approval to the deal.

The agreement was reached amid hours of intense diplomacy involving U.S. Secretary of State Hillary Clinton and United Nations Secretary-General Ban Ki-moon.

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