GAZA CITY, Gaza Strip - Palestinian infighting raged in the Gaza Strip Tuesday morning despite a ceasefire declaration by warring Hamas and Fatah factions aimed at ending factional clashes that have left more than 60 dead in the past two months.

Gunfire and explosions were audible in downtown Gaza City as gunmen from the rival factions ignored the ceasefire, reached at a midnight meeting between Prime Minister Ismail Haniyeh of Hamas and a representative of Palestinian President Mahmoud Abbas of Fatah.

The truce was set to go into effect at 3 a.m. local time.

Foreign Minister Mahmoud Zahar of Hamas announced the agreement early Tuesday. Zahar said the agreement stipulated that all security forces must return to their bases, that suspects in killings were to be handed over, and that all hostages still being held -- a number thought to be in the dozens -- were to be released. He also said all roadblocks set up by the factions were to be removed.

None of those steps appeared to have been taken after the 3 a.m. deadline passed.

Several earlier truce agreements aimed at stopping the internal Palestinian bloodshed, raging fitfully since early December, have broken down.

Fatah spokesman Maher Mekdad had said his group would observe the agreement.

"Despite all the bitterness and sadness that we are feeling, we will work to make it succeed," he said.

The agreement between the Palestinian factions came as a two-month truce between the Palestinians and Israel in Gaza was jeopardized by a Palestinian suicide bombing, the first since April, 2006. The bomber, a 21-year-old from Gaza, struck the Israeli resort city of Eilat, killing three people and himself.

The two radical groups that claimed to have sent the bomber said they were trying to end Palestinian infighting by taking aim at Israel instead.

Hamas, which controls the Palestinian parliament and Cabinet, praised the attack as legitimate resistance.

Israel's first response came early Tuesday. The army said its aircraft bombed a tunnel dug by Palestinians near the Gaza-Israel border meant to be used by militants for an attack against Israel. No casualties were reported.

Israel has observed a truce with the Palestinians in Gaza since late November, and the airstrike signaled that the Eilat bombing put that cease-fire in danger.