Eight days of punishing Israeli airstrikes on Gaza and a barrage of Hamas rocket fire on Israel ended inconclusively. While Israel said it inflicted heavy damage on the militants, Gaza's Hamas rulers claimed that Israel's decision not to send in ground troops, as it had four years ago, was a sign of a new deterrent power.
"Resistance fighters changed the rules of the game with the occupation (Israel), upset its calculations," Gaza Prime Minister Ismail Haniyeh of Hamas, who attended the rally, said later in a televised speech. "The option of invading Gaza after this victory is gone and will never return."
At the same time, Haniyeh urged Gaza fighters to respect the truce and to "guard this deal as long as Israel respects it."
The mood in Israel was mixed. Some were grateful that quiet had been restored without a ground operation that could have cost the lives of more soldiers. Others -- particularly those in southern Israel hit by rockets over the past 13 years -- thought the operation was abandoned too quickly.
Thousands of Israeli soldiers who had been sent to the border during the fighting withdrew Thursday, the military said.
Israeli Prime Minister Benjamin Netanyahu said the offensive's aims of halting Gaza rocket fire and weakening Hamas were achieved. "I know there are citizens who were expecting a harsher response," he said, adding that Israel is prepared to act if the cease-fire is violated.
In a development that could complicate cooperation on the cease-fire, Israel on Thursday arrested an Arab-Israeli man connected to Hamas and Islamic Jihad on accusations he planted a bomb on a bus in Tel Aviv that wounded 27 people in the hours before the agreement was announced Wednesday, police said.
A Palestinian militant cell based in the West Bank village of Beit Lakiya dispatched the man, who lived in the village of Taybeh in Israel, to put a bomb on the bus, police spokesman Micky Rosenfeld said. He then got off and called his handlers, who remotely detonated the explosive by calling the phone, Rosenfeld said.
"He admitted to carrying out the terrorist attack," said Rosenfeld, who declined to name the man.
Attacks by Israeli Arabs are rare, though they have happened in the past.
Nevertheless, the cease-fire raised hopes of a new era between Israel and Hamas.
A senior Israeli official and three aides arrived in Cairo late Thursday and were escorted to Egypt's intelligence headquarters, according to Egyptian airport officials, presumably to hammer out the details of a deal that would include easing a blockade of the territory.
The airport officials declined to be named because they were not authorized to give information to the media.
However, the vague language of the agreement announced Wednesday and deep hostility between the combatants made it far from certain the bloodshed would end or that either side will get everything it wants. Israel seeks an end to weapons smuggling into Gaza, while Hamas wants a complete lifting of the border blockade imposed in 2007, after the militant group's takeover of Gaza.
Israeli officials also made it clear that their position had not warmed toward Hamas, which they view as a terror group aligned with their archenemy Iran and pledged to the destruction of the Jewish state.
"Without a doubt, Israel in the long run won't be able to live with an Iranian proxy on its border," Israeli Foreign Minister Avigdor Lieberman told Israel's Channel 10. "As long as Hamas continues to incite against Israel and talk about destroying Israel they are not a neighbor that we can suffer in the long run. But everything in its time."
Israel launched the offensive Nov. 14 to halt renewed rocket fire from Gaza, unleashing some 1,500 airstrikes on Hamas-linked targets, while Hamas and other Gaza militants showered Israel with just as many rockets.
The eight days of fighting killed 161 Palestinians, including 71 civilians. Six Israelis, two soldiers and four civilians, were killed and dozens others wounded by rockets fired into residential neighborhoods.
Gazans celebrated the truce after a night of revelry.
"Today is different, the morning coffee tastes different and I feel we are off to a new start," said Ashraf Diaa, a 38-year-old engineer from Gaza City.
Hundreds of masked Hamas fighters appeared in public for the first time since the offensive during a funeral for five of their comrades. The armed men displayed grenade launchers and assault rifles mounted atop more than 100 brand-new pickup trucks.
The latest round of fighting brought the Islamists unprecedented political recognition, with foreign ministers from Turkey and several Arab states visiting -- a sharp contrast to Hamas' past isolation.
Israel and the United States, even while formally sticking to a policy of shunning Hamas, also acknowledged its central role by engaging in indirect negotiations with them.
Egypt emerged as the pivotal mediator, raising its stature as a regional power.
Egyptian President Mohammed Morsi will now have to assume a more direct role as a referee between Israel and Hamas, at a time when he faces many domestic challenges, including reviving a faltering economy.
Hamas leader Khaled Mashaal and the head of the smaller Islamic Jihad militant group Ramadan Shalah met with Egypt's intelligence chief Thursday as the follow-up talks geared up.
Reaching a deal on a new border arrangement for Gaza would require major concessions from both sides.
Hamas wants both Israel and Egypt to lift all border restrictions.
In 2007, Israel and Morsi's pro-Western predecessor, Hosni Mubarak, sealed the territory, banning virtually all travel and trade. Israel eased its restriction somewhat in 2010 in response to international pressure, allowing Gazans to import consumer goods, while barring virtually all exports and travel. Gaza's battered economy recovered slightly, but the ban on exports prevented it from bouncing back fully.
After Mubarak's fall last year, Egypt eased travel through its Rafah crossing with Gaza. However, Morsi has rebuffed Hamas demands to allow full trade ties, in part because of fears this would give an opening to Israel to "dump" Gaza onto Egypt and deepen the split between Gaza and the West Bank.
Palestinians hope the West Bank and Gaza, which lie on opposite sides of Israel, will one day make up the bulk of a Palestinian state. Israel has barred most travel between them during the past decade and closer ties between Egypt and Gaza could exacerbate the division.
Israel, meanwhile, wants Egypt to halt weapons smuggling into Gaza through tunnels under the border. Hamas has been able to significantly boost its arsenal in the past four years, largely with weapons from Iran, according to Mashaal, who thanked Tehran for its support late Wednesday.
As part of the cease-fire, Israel received U.S. pledges to help curb arms shipments to Gaza.
The fighting gave a major boost to Hamas' popularity, not only in Gaza but also in the West Bank, where the Islamists' internationally backed rival, Palestinian President Mahmoud Abbas, oversees a self-rule government.
Abbas, the leading Palestinian proponent of non-violence and negotiations with Israel, was forced to watch from the sidelines as his bitter rivals scored political points.
A senior Abbas aide, Nabil Shaath, stood alongside Hamas leaders during Gaza City's victory rally Thursday. Despite the symbolism, it was not clear whether the two sides would be able to mend their rift.