Jerusalem - Declaring Hamas "badly beaten," Israeli Prime Minister Ehud Olmert ordered a unilateral halt to Israel's punishing offensive in the Gaza Strip starting yesterday. But he said Israeli forces will stay in the Palestinian territory for now, and Hamas threatened to keep fighting until they leave.
Israel's decision, which took effect at 2 a.m., could bring relief to the battered coastal enclave after 22 days of airstrikes and a thundering ground offensive that killed more than 1,200 people and reduced entire residential city blocks to rubble.
The path to peace, however, was unclear. Olmert said he chose to shun a negotiated cease-fire accord with Hamas and simply hold fire, denying the Islamic group the deal it had sought on easing an Israeli blockade of Gaza.
Olmert declared the cease-fire on national television late Saturday, about three hours before it took effect. The announcement came on a day of new protests by the United Nations over civilian casualties, after a tank shell hit a U.N. school, killing two young brothers taking shelter there.
By stopping the offensive, Israel decided to spare Barack Obama the specter of a Middle East blood bath on his inauguration day tomorrow and avoid friction with the new U.S. administration.
But the aftermath of the assault, one of the deadliest in Israel's decades-old conflict with the Palestinians, has already complicated one of the Obama team's foreign policy goals - helping to forge a peace accord between Israel and the moderate Palestinian Authority faction that runs the West Bank.
Palestinians envision establishing a state in Gaza and the West Bank, but the bloodshed in Gaza prompted the West Bank leadership to suspend peace talks with Israel.
Israel withdrew its military bases and settlements from Gaza in 2005. The blockade was imposed after Hamas, which does not recognize Israel's right to exist, won parliamentary elections in 2006 and was tightened after the group took exclusive control of the territory the next year.
The declared aim of Israel's offensive was to stop the near-daily rocket fire from Gaza and choke off Hamas' supply of weapons. Hamas said it was fighting to end the blockade, which deprives the coastal territory's 1.5 million people of adequate fuel, water, electricity and medicine.
In his televised speech, Olmert said the operation had "more than fully achieved" its goals. It drove Hamas' leaders into hiding, destroyed its rocket-making factories and blew up its underground smuggling routes, he said.
Israel was under growing international pressure to stop the offensive. At least one-third of the dead are Palestinian children, according to Gaza health ministry figures that the United Nations deemed credible.
Thirteen Israelis - 10 soldiers and three civilians - were killed.
Olmert said Israeli withdrawal from Gaza would depend on whether Hamas stops fighting.
"If they stop firing, we will consider pulling out of Gaza at a time that suits us," he said.
On the other hand, "if they continue attacking us, they will again be surprised by our determination," he added.
Special correspondent Rushdi abu Alouf contributed to this report.