The truce came ahead of talks in Cairo aimed at brokering a deal that would prevent future cross-border violence.
The temporary truce, agreed to by both sides, started at 8 am (0500 GMT) and was to last for 72 hours during which Israel and Hamas are to hold indirect talks in the Egyptian capital.
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Previous international attempts to broker a temporary halt in the fighting failed.
The gaps between the sides are vast and the situation remains volatile - just minutes ahead of the start of the truce, shelling still echoed across Gaza.
Hamas wants Israel and Egypt to lift their seven-year-old Gaza border blockade. Israel wants Hamas to be disarmed.
Earlier on Tuesday , the Israeli military announced that all its ground troops will have pulled out of Gaza by the start of the new cease-fire.
Military spokesman Lt. Col. Peter Lerner said the withdrawal was going forward after Israel completed the destruction of 32 cross-border tunnels that were built for Islamic militant attacks inside Israel.
During the course of the fighting, Israeli forces killed some 900 Palestinian militants, Lerner said.
The war broke out on July 8 when Israel launched an air offensive in response to weeks of heavy rocket fire out of Hamas-controlled Gaza. It expanded the operation on July 17 by sending in ground forces in what it described as a mission to destroy a network of tunnels used to stage attacks.
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