The Islamic group’s late-night announcement came after days of pressure from Israel, the Palestinian Authority and Egyptian mediators amid the worst violence since Israeli settlers and troops withdrew from the coastal strip.

“We call on our military groups to stop their operations against the enemy from the Gaza Strip,” said Mahmoud Zahar, Hamas’s most senior figure in Gaza.

He said that the decision was to “protect the Palestinian people from the oppression of the Zionists”, instructing its armed units to stop parading weapons and to use arms “only in the face of the occupation”.

It was unclear whether the surprise declaration would halt Israel’s strikes, which followed orders by Mr Sharon to stop Palestinian rocket attacks on Israeli towns “by any means”. Yesterday 207 suspected militants, mainly Hamas and Islamic Jihad, were arrested in raids across the West Bank.

Mr Sharon’s already shaky position — ahead of a challenge from the hawkish Binyamin Netanyahu — was undermined by a barrage of Palestinian missiles into Israel in the 48 hours before he was scheduled to square off against his rival last night in a contest for leadership of the ruling Likud Party.

The Prime Minister today learns if he faces early leadership elections. Last night there were farcical scenes in which he stormed off the stage at the rowdy party convention in Tel Aviv without making his key address because opponents cut the power to his microphone.

The 77-year-old former general faces anger among Likud’s 3,000 central committee members for the Gaza withdrawal, which party activists see as a betrayal of Jewish settlers.

Earlier Mr Netanyahu was cheered when he said that the pullout jeopardised Israel. “They are telling us they will continue with painful concessions,” he thundered. “Don’t we have enough with the Hamas state in Gaza? . . . We will all be in danger.”

If Mr Sharon loses he could quit Likud and form a new centrist alliance. He remains more popular than his telegenic rival among the wider electorate; there was majority support for his Gaza initiative.

Israel launched a series of strikes over the weekend after Hamas and Islamic Jihad fired dozens of rockets into Israeli towns from Gaza. In the first stage of what the Defence Minister, Shaul Mofaz, said would be a “crushing and unequivocal” response, Israeli jets bombed a Hamas children’s school in northern Gaza, and the Cabinet agreed to resume assassinations of militants, suspended after a February truce.

They also cleared the step of stationing an artillery battery on the edge of Gaza, from which blank warning rounds were yesterday fired into uninhabited fields in northern Gaza.

As the Likud convention met, the Israeli military continued its airstrikes, killing a Islamic Jihad leader in the southern Gaza Strip. Israel said that Mohammed Khalil had been behind attacks that killed 17 Israelis, including, in May 2004, the shooting of a pregnant Israeli woman and her four daughters near a Gaza settlement.

In contrast to Hamas’s move last night, Islamic Jihad immediately announced an end to the ceasefire. Its leader, Mohammed al-Hindi, said: “There is no talk of a truce, there is only room for talk of war.”

On Friday an explosion killed at least 17 people, many of them children, at a Hamas rally in Jabalya in Gaza. Hamas blamed Israel, and launched rockets into the south of the country, injuring five Israelis. But Israel denied responsibility for the Jabalya blast — and the Palestinian Authority swiftly confirmed suspicions that it had been caused by Hamas mishandling rockets.Mahmoud Abbas, the Palestinian leader, condemned militants for keeping explosives in built-up areas.

Last night gunfire erupted outside the home of the Palestinian official vilified by militants for putting the blame on Hamas. Tawfiq Abu Khoussa, the Palestinian Interior Minister’s spokesman, was not harmed.

POLL TIMETABLE

ISRAEL Yesterday Speeches by Ariel Sharon and his chief critic Binyamin Netanyahu

Today Likud Central Committee vote on early elections for party leadership

November Party primaries held early, if Netanyahu successful. Polls show that he has a narrow majority.

April 2006 Primaries held on schedule, if Sharon successful

November 2006 General election due, but now likely to be held earlier

PALESTINIANS Today vote of no confidence in Ahmed Qureia’s government for failing to end lawlessness. Postponed because of escalating violence with Israel

January Scheduled elections for the Palestinian Legislative Council. Hamas to contest elections for first time. It is likely to win 20-30 per cent against President Mahmoud Abbas’s hitherto dominant Fatah faction, now weakened by factionalism and infighting

Times Recommends

• No cause for celebration in crushed Sarajevo
• Jazz funeral for the final victims of Katrina
• French fined for 'insulting' civil servants