Israeli troops have reportedly left key positions in Gaza City after Hamas set a one-week deadline for their complete pull-out from the strip.

Witnesses told AFP that Israeli ground forces withdrew toward the Israeli border fence in eastern and northern Gaza on Sunday.

This is while Israel had earlier denied that it was considering a timetable for the withdrawal of troops from the costal enclave in the wake of Tel Aviv's 'unilateral ceasefire' which was announced late Saturday.

Hamas, however, declared said it would observe a ceasefire should Israeli forces withdraw from the beleaguered territory, giving Tel Aviv one-week ultimatum to complete the troop-pullout.

The recent developments followed over three weeks of non-stop Israeli aggression against the Gaza Strip, which has left more than 1,300 Palestinians killed and left at least 6,000 others wounded.

Prime Minister Ehud Olmert described the Operation Cast Lead, which was launched on December 27, as a success, saying that Tel Aviv had reached all its the objectives.

This is while, the onslaught has failed to put and end to Palestinians fighters' retaliatory rocked launches and has also failed to topple the democratically- elected Hamas government in Gaza, -- both viewed as main objectives of Israeli military campaign.

In addition, the fate or whereabouts of Israeli soldier Gilad Shalit remains unknown to Israelis.

Shalit was captured by resistance fighter during a cross border operation two year ago. Hamas has tried to exchange him for the release over a thousand Palestinian prisoners, who are suffering from dire conditions in Israeli jails.