Israel has accepted a UN request for a 24-hour ceasefire in Gaza.
However, Israel has warned the army will act if the pause is breached by Palestinian militants.
A crisis cabinet meeting extended Saturday’s truce until midnight on Sunday.
The move comes despite Hamas militants firing rockets after they rejected an earlier attempt to prolong the truce.
Hamas said it would not accept a truce unless Israeli troops left Gaza and the displaced were allowed to return home.
Israel said that it would continue operations against tunnels used by Hamas during the truce period.
Hamas has accused Israel of using previous ceasefires to prepare more attacks, and claimed that there had been truce violations during Saturday.
The Israeli military said a soldier was killed by a mortar shell fired from Gaza early on Sunday morning, bringing the death toll among its armed forces to 43. Two Israeli civilians and a Thai farm laborer working in Israel have also been killed in recent hostilities.
The health ministry in Gaza says 1,033 Palestinians, mostly civilians, have been killed and about 5,900 wounded since Israel launched its Gaza offensive 19 days ago.
Rocket sirens continued to sound across Israeli cities into Sunday. The Israel Defense Forces (IDF) said some 20 rockets had been launched toward Israel since Saturday night.
The military said three mortars had been fired from Gaza and hit Israel in the Eshkol region shortly after 20:00 local time on Saturday.
Hamas’ armed wing, the Qassam Brigades, said they had fired a number of short- and longer-range missiles into Israel.
The original truce expired at 20:00 local time on Saturday. Gazans had been using the pause to recover bodies and gather supplies.
Gaza health ministry spokesman Ashraf al-Qidra said that almost 150 bodies had been found in the rubble on Saturday.
After talks in Paris on Saturday, foreign ministers from the US, Turkey, Qatar and several European countries urged both sides to extend the truce.
Israeli cabinet minister Gilad Erdan told Reuters on Saturday that a definitive deal looked remote, with no representatives from Israel, Egypt or the Palestinian Authority attending the Paris talks.
Also on Saturday, pro-Palestinian demonstrations took place in several global capitals.
Around 5,000 people rallied in Paris in defiance of a ban by the French authorities – about 50 people were arrested during clashes with police. Thousands also took part in a protest in London against Israel’s military campaign.
Israel launched its military offensive with the declared objective of stopping Hamas firing rockets from Gaza into Israel.
It also began a ground offensive on July 18, saying it was necessary to destroy tunnels dug by militants to infiltrate Israel.
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