A cease-fire agreed by the Palestinians and the Israelis late yesterday, has held over night.
After eight days of violence and more than a hundred people killed, an uneasy peace is in place across the region.
However, leaders on both sides of the conflict are warning that they"re ready to resume military activities if they"re provoked
Our reporter Shona Murray is in Tel Aviv, where she says there have been some rockets fired into Israel overnight, but the cease-fire does seem to be holding.
Yesterday 21 people were injured after a bus bomb attack in Tel Aviv.
The US Secretary of State Hillary Clinton has praised the new Egyptian government for its efforts to bring stability to the region.
She was speaking after a meeting with the Egyptian Foreign Minister Mohamed Kamel Amr in Cairo.
"This is a critical moment for the region" she said.
"Egypt"s new govenrment is assuming the respnsibility and leadership that has long made this country a corner-stone of regional stability and peace" she added.
Leaders welcome agreement
While former American Peace Envoy US Senator George Mitchell says the ceasefire is proof that peace can be achieved between Israel and Palestine.
"The self-interest of the Palestinians and the Isrealis - so much lies in resloving their conflict and the region as a whole, but ultimetly I think they"ll come to recognise that".
"Even though - I"m frank to say - it hasn"t happened yet: 12 Israeli Prime Ministers, 10American Presidents, 20 Secretary"s of State have all tried their hand at this over the last half centruy without success - but we have to keep trying" he added.
The UK Foreign Secretary William Hague has welcomed the agreement.
"I urge all sides to uphold their commitments, and pay tribute to President Mursi and the Egyptian government for their intensive efforts and the leadership they have shown, as well as to Secretary of State Clinton and UN Secretary General Ban Ki-moon for the role they have played" he said.
"This ceasefire is an important step towards a lasting peace" he added.
