Israel began withdrawing the army on Thursday that had been poised to invade the Gaza Strip to go after Hamas, with both sides declaring they had won their eight-day battle.

Dust-covered tanks and armored bulldozers were winched onto transporters and driven out of the same groves of straggly eucalyptus where they camped in January 2009 before going in.

That conflict cost more than 1,400 lives, all but 13 Palestinian, while this time, some 160 Palestinians were killed in eight days of fighting, against six Israelis.

Hamas nevertheless declared it had come out on top.

"From the lion's den, we declare victory," said Abu Ubaida, spokesman of Hamas' armed wing, Izz el-Deen Al-Qassam Brigades. Israel's "security hallucination" had been exposed.

Islamist militants launched more than 700 rockets from Gaza by the end of October, Israel said, to explain its decision to set off the latest conflict by killing Hamas's top military commander with a precision strike from an F16 fighter jet.

Psychologically and in propaganda terms, the long-range rockets Hamas fired all the way towards Tel Aviv and Jerusalem over the past eight days were a game-changer, celebrated by Gazans who were also relieved the invasion never came.

But 84 percent of Gaza's rockets were knocked out of the sky by Israel's new Iron Dome interceptor defence, neutralizing Hamas' main weapon.

The Israeli army says Islamist fighters fired 1,500 rockets at Israel, both home made and smuggled from Iran, scoring two lethal hits. The same number of Israeli strikes killed 30 senior militiamen and blew up rockets, launchers and arms dumps.

The ceasefire agreement, Israel's Defence Minister Ehud Barak said, was "a paper bridge for the defeated so that they can explain to their public how they can even show their faces after what they were hit with for a week".

The truce, arranged by Egypt, "could last nine months. It could last nine weeks. And when it no longer continues we will know what to do," Barak said.

Tanks, self-propelled artillery, armored personnel carriers and Humvees were lined up in some of the same fields they used four years ago, when they did invade, Israel's blue and white flag flying from their radio masts.

They will be pulled out in the next day so farmers can get back to work. At Kerem Shalom, on the border with Egypt and Gaza, trucks carrying international food aid were rolling again on Thursday into a terminal where freight is re-loaded onto Palestinian trucks for 1.2 million people in Gaza who depend on it.

Empty buses were coming down Route 232, which runs parallel to the Gaza Strip from north to south, to pick up soldiers no doubt relieved to know they would not have to go in.

In 2009, after a week of aerial bombing and long-range shelling, this country road with kibbutz farms on either side was the launch point for some 30,000 troops and armour that cut the Gaza Strip in two.

Israel is a small country and the frontline is only 70 km (40 miles) from Tel Aviv. The army could be back in place in little more than half a day if needed.

The truce will test the intense distrust between Israel and the Islamist movement that runs Gaza, but both sides had a clear interest in not prolonging the conflict.

Israeli Prime Minister Benjamin Netanyahu agreed to cease fire just hours after a bomb exploded on a Tel Aviv bus, prompting opposition charges of weakness but winning international credit he may seek to draw on in Israel's standoff with Iran, whose disputed nuclear program he considers an existential threat.

"I don't hanker to go back in to Gaza. I'm persuaded that Hamas has no hankering to repeat what happened to it over the last week, and ditto Islamic Jihad," Barak told Israel radio.

Hamas had managed to fire one tonne of high explosive into Israel's built-up areas, he said. Israel hit Gaza targets with around 1,000 tonnes.