The truce aims at giving more time for negotiations on a complete long-term ceasefire, said Azam el-Ahmed, the head of the Palestinian delegation in Cairo.
The decision came an hour before the current five-day truce ends. Media reports said the both sides are to sign an agreement on long-term ceasefire before the end of the truce.
Since last week, Egypt has been hosting indirect talks between the two sides aimed at ending a devastating month-long fighting which erupted on July 8, as the death toll in the war-torn Gaza Strip pushed over 2,000.
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