Details have not been made public, but the deal is likely to see the release of 50 women and children held captive in Gaza.
The agreement came after talks on the Qatar-mediated deal that continued into the early hours of Wednesday morning, with Israeli media reporting heated exchanges between ministers of Prime Minister Benjamin Netanyahu’s government.
The prime minister’s office said the government had agreed to a deal under which Hamas will release at least 50 women and children during a “pause in fighting” of about four to five days.
Israel is expected to release about 140 Palestinian prisoners from Israeli jails in return.
The final agreement has not been made public but it is also thought to allow humanitarian aid to be sent into Gaza, which has been under intense Israeli bombardment since the Hamas attack. More than 14,100 people have been killed.
There are about 237 captives held in Gaza from Israel and several other countries. Foreign nationals are not thought to be included in the agreement.