Joe Biden claims that Israel has proposed a three phase plan which includes a "full and complete ceasefire" and the return of all Israeli hostages from Gaza.
The US president has urged leaders on both sides not to "lose this moment" as he argues against "indefinite war".
The first phase of the proposed deal would be a ceasefire lasting six weeks, Biden has said.
It would include the withdrawal of Israeli forces "from all populated areas of Gaza" and a "full and complete ceasefire".
Phase two would involve Hamas handing over all remaining living hostages.
While the final phase would be about a "major reconstruction plan" for Gaza, according to the US president.
He added: "Any final remains of hostages who have been killed would be returned to their families."
After announcing the ceasefire, Biden said this is "truly a decisive moment".
"Israel has made their proposal, and Hamas says it wants a ceasefire - this deal is an opportunity prove whether they really mean it. Hamas needs to take the deal," he said.
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