JERUSALEM (AP) – Israel and the Palestinians agreed to a cease-fire Saturday to end a five-month Israeli military offensive in the Gaza Strip and the firing of rockets by Palestinian militants into the Jewish state – a major step toward possibly reviving long-stalled peace talks.

The Israeli military said early today that it withdrew all its troops from Gaza in the hours before the 6 a.m. cease-fire took effect.

The truce announcement was a significant achievement for Palestinian President Mahmoud Abbas as he tries to put together a more moderate government to replace the one currently led by Islamic Hamas radicals. Abbas, a moderate from the Fatah Party, hopes a deal with Hamas will persuade the West and Israel to lift crushing economic sanctions against the Palestinians.

The sides announced the cease-fire after Abbas telephoned Israeli Prime Minister Ehud Olmert late Saturday to tell him he had arrived at an agreement with all Palestinian factions – including those allied with Hamas – to stop all rocket attacks and suicide bombings from Gaza.

Abbas asked that Israel, in turn, stop its military operations in Gaza and withdraw its forces, and Olmert agreed, representatives for both leaders said.

Abbas spokesman Nabil Abu Rdeneh said from Gaza City that Palestinian Prime Minister Ismail Haniyeh of Hamas and the Palestinian factions had agreed to reinstate a truce between Israel and the Palestinians reached in Egypt in February 2005.

Earlier in the day, various militant factions had denied reaching a cease-fire agreement. But after it was officially announced, they acknowledged the accord and said the denials were linked to power struggles among themselves.

The agreement Abbas wrested from the Palestinian armed groups promises to end the military campaign Israeli launched in Gaza less than a year after evacuating the territory. Israeli forces originally entered Gaza in late June in an effort to win the release of a soldier captured in a June 25 cross-border raid by Hamas-linked militants and still in captivity.

But Israel soon widened its operations to target militants who had intensified their near-daily rocket attacks on communities in southern Israel. Despite international criticism over Palestinian civilian deaths, Olmert had pledged earlier this month to continue the offensive until Palestinian rocket attacks from Gaza significantly decreased.

Instead, the rocket fire in November has more than doubled from October.

The capture of Cpl. Gilad Shalit in June and the subsequent Israeli offensive cut short efforts by Olmert and Abbas to restart peace talks that broke down six years ago. A truce could help to create the momentum to get talks moving.

“We welcome the announcement and see this as a positive step forward,” White House spokesman Alex Conant said Saturday evening in Washington. “We hope it leads to less violence for the Israeli and Palestinian people.”

The violence over the last five months has killed more than 300 Palestinians, mostly militants. Earlier this month, 19 members of an extended family were killed in an artillery attack in the northern Gaza town of Beit Hanoun, prompting worldwide calls for Israel to end its offensive. Israel expressed regret for the loss of civilian life and blamed the deaths on a technical problem.

Five Israelis have been killed during the offensive – three soldiers in Gaza and two civilians hit by rocket fire in Israel. In addition, two other soldiers were killed during the cross-border raid on June 25.

On Saturday, blasts ripped apart two cars carrying militants in Gaza City, killing at least one and wounding several passers-by, Palestinian medical officials said. One vehicle was struck by missiles fired from an Israeli aircraft, and the source of the other blast wasn’t known.

Three other militants were killed in clashes with Israeli troops elsewhere, including two hit by Israeli fire near the main Gaza-Israel cargo crossing, Palestinian officials and Hamas said. The army said it had no information about fighting at the Karni passage.

The West and Israel placed economic sanctions on the Palestinians after Hamas won legislative elections in January because the militant group refused to meet international demands to renounce violence, recognize Israel and honor past peace agreements.

Hamas and Fatah have been in talks in recent weeks on the formation of a more moderate government of professionals to replace the one led by Hamas. Another major element of the talks is the release of the captured Israeli soldier in exchange for Palestinians that Israel holds.

Hamas’ supreme leader, Khaled Mashaal, was in Cairo to discuss both issues with Egyptian mediators, but there was no word of a breakthrough.

Mashaal said his group was willing to give peace negotiations with Israel six months to reach an agreement for a Palestinian state in Gaza and the West Bank. If the talks failed, however, he threatened a new armed uprising.

The double-edged comments were his strongest confirmation that the Islamic militant group would allow Abbas to try to negotiate with Israel. But it was also the first time he has set a deadline with an explicit threat of a new uprising.

“We give six months to open real political horizons … We agreed on the national accord to establish a Palestinian state, with the June 4, 1967 borders,” he told a news conference in Cairo, referring to Israel’s borders before it captured the West Bank, east Jerusalem and the Gaza Strip.

“They have to seize this opportunity,” Mashaal said.

If an agreement is not reached within that time frame, Mashaal threatened a new confrontation with Israel. “Hamas will become stronger and the resistance will resume … and will go on with a third uprising,” he said.

Israel had no immediate comment on Mashaal’s proposal.

Mashaal said “great strides” had been made in negotiations over a new government. But he said “more time” was needed and stuck to Hamas’ rejection of a Cabinet made up of technocrats rather than politicians from the two parties.

He also blamed Israel for failure to reach a deal for the release of Israeli Cpl. Gilad Shalit in return for Palestinian prisoners held by Israel.

“We are not the reason behind postponing the decision; the postponing of a settlement is due to the other side,” Mashaal said of a prisoner swap.