The truce was extended until midnight on August 19 to allow talks on a more long-term arrangement.
A Palestinian official told Reuters there had been “no progress” so far but without a deal, violence would go on.
Officials say that 2,016 Palestinians and 66 Israelis have died since Israel began its offensive on Gaza on July 8.
In a statement that came minutes before the expiry of a previous truce at midnight on Monday, the Egyptian government released a statement confirming both sides had accepted its request for an extension.
The previous ceasefire came into effect last Wednesday.
Earlier, Israel PM Benjamin Netanyahu said Israeli forces would hit back hard if Hamas resumed rocket fire.
He said the military was “ready for all scenarios” and were prepared “for very resolute action if fire resumes”.
Negotiating teams returned to Egypt’s capital Cairo for indirect talks on Sunday.
Palestinian negotiator Qais Abdul Karim said on Sunday that Israel was seeking guarantees that Hamas and other factions in Gaza would be disarmed.
Palestinians are calling for an end to the Israeli and Egyptian blockades of Gaza without preconditions, he added.
Hamas says it will not give up its weapons, while Israel insists it must maintain some control over Gaza’s crossings to prevent the smuggling of weapons.
Israel is also concerned by the import of building materials into Gaza, saying they could be used by Hamas to rebuild its tunnel network.
Middle East envoy Robert Serry said on Monday that the UN was ready to oversee imports of construction material sent to Gaza.
Robert Serry said the imports were crucial after “the unprecedented amount of destruction” had caused an “unprecedented level of humanitarian needs”.
Approximately 16,800 housing units in Gaza had been destroyed, Robert Serry added, affecting some 100,000 Palestinians.
In addition, he said more than 100 installations belonging to the UN agency for Palestinian refugees had been damaged.
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