The New Zealand government on Sunday welcomed the news of a ceasefire in the Gaza Strip, hailing it as important progress.

New Zealand Prime Minister John Key said on Sunday that New Zealand wanted to see peace restored in the area.

He said the only way for that to take place is through constructive, positive and meaningful dialogue.

"The laying down of arms and getting around the table is an important step toward peace," the Prime Minister said in a statement.

A period of diplomacy is necessary to ensure the ceasefire in Gaza sticks, he said, adding that there could not be a one-sided ceasefire, and Hamas needs to lay down its arms before progress is made toward a long-term solution.

He said it is good to see that Egypt has called for a summit of countries that have played a role in trying to broker this ceasefire, including France and Britain as well as the United Nations.

Israeli Prime Minister Ehud Olmert made a cease-fire announcement early Sunday morning (local time), after a 22-day military attack which has left more than 1,200 Palestinians dead.

However, Hamas said it will continue fighting as long as Israel's troops remain in Gaza.