FACTBOX - Why Israel and Hamas wanted a truce in Gaza

(Reuters) - An informal truce announced on Tuesday between Israel and Palestinian militants in the Hamas-controlled Gaza strip is meant to halt cross-border fighting as well as gradually and partially ease Israel's economic blockade of the Gaza Strip.

WHY ISRAEL AGREED TO TRUCE:

- The United States pressed for a truce to remove an obstacle in peace talks between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas.

- Israel wants to stem international criticism of its blockade strategy and fears a military push in Gaza would result in heavy casualties on both sides and may not end decisively.

- By insisting the economic blockade be eased only gradually and partially, Israel minimises the immediate impact of the truce on the ground and maintains the flexibility to reimpose the sanctions later. Israel's phased approach reflects its scepticism the truce will last. The army has been instructed to prepare for a possible large-scale Gaza operation if the ceasefire collapses.

- The Rafah crossing between Gaza and Egypt will remain closed for now. Israel has linked its opening to "significant" progress toward freeing captured Israeli soldier Gilad Shalit.

- Israel succeeded in getting Hamas to drop its long-standing demand that any ceasefire apply both to Gaza and to the occupied West Bank.

- Israel used the truce talks to increase pressure on Egypt to do more to stem arms smuggling into the Gaza Strip.

WHY HAMAS WANTED A TRUCE: