It's the first step in a process that includes the deployment of a 15 thousand strong UN force in Lebanon.
Just before the ceasefire took effect Israeli warplanes struck a Hezbollah stronghold in eastern Lebanon and a Palestinian refugee camp killing one person.
The ceasefire, follows a Security Council resolution calling for an end to hostilities, that was passed unanimously on Friday after weeks of diplomatic wrangling.
However, it is a fragile truce with the Israeli army saying the military has been told not to initiate any action after the ceasefire but forces would do everything to prevent being hit.
The Israeli army would also continue to enforce an air and sea blockade on Lebanon despite the ceasefire taking effect.
Israel says the blockade would remain in place until there was a system to prevent weapons reaching Hezbollah guerrillas.
Meanwhile, the Lebanese government, although approving the ceasefire resolution has postponed indefinitely a meeting on disarming Hezbollah.
Hours earlier
Just hours before the ceasefire Israel has launched an 11th hour bid to crush Hezbollah with waves of deadly air strikes while Shiite fighters unleashed a barrage of rockets.
More than 30 Lebanese civilians were killed by Israeli fire as warplanes kept up their deadly bombing while five Israeli soldiers were also killed in action.
Israel urges deployment
Mark Malloch Brown, the UN's Deputy Secretary General, said it might take a month before a joint UN-Lebanese force was fully in place.
"It's going to be weeks, not days and may even, before you hit the full total, be a month or so," he told the BBC.
Israel has urged the world to apply the UN resolution firmly, warning that Hezbollah must be dismantled and the Lebanese army quickly deployed in the south.
"The application of the resolution will depend on the will of the Lebanese government, but especially on the determination of the international community," Foreign Minister Tzipi Livni said in Jerusalem.
"It is clear that Resolution 1701 foresees the dismantling of Hezbollah and not only the disarming" of the militant group, she said.
"We want to see the Lebanese army deployed immediately in south Lebanon."
The UN ceasefire raised hopes of an end to the bloodshed which has claimed the lives of more than 1,000 Lebanese and some 150 Israelis.
But with Hezbollah vowing to fight until the last Israeli soldier leaves Lebanon and Israel stressing that it will respond to any attack on its troops or rocket fire, the ceasefire will be delicate.
The bloodshed went on even after the announcement of Monday's planned ceasefire.
In one of the deadliest raids, at least 10 people were killed and 20 wounded by Israeli air strikes that hit eight buildings and a mosque in Beirut's southern suburbs, emergency services said.
Israel's army estimates it's killed 530 Hezbollah guerrillas during one month of fighting in Lebanon and has released the names of 180 whose deaths it says have been verified.
However, Hezbollah has acknowledged only a few dozen dead during the conflict.
Peace activist’s son killed
In Israel a man was killed by a rocket attack in the north of the country as the Shiite militia fired a record 250 rockets at the Jewish state.
The Israeli army also said that Uri Grossman, the son of prominent Israeli author David Grossman, was among the 24 Israeli soldiers killed in combat Saturday, just days after his father urged his government to reach a truce.
It was the highest single-day toll since the war began on July 12.
In what the media have called the largest ground operation since the 1973 Middle East war, Israel was sweeping through south Lebanon where Hezbollah is entrenched, with some troops reaching the strategic Litani River which runs as far as 30 kilometres from the border.
Israeli Deputy Prime Minister Shimon Peres sought to put a positive spin on the war's outcome despite the failure to stem Hezbollah rocket fire.
"I think that we have finished more or less the victors both militarily and politically," he told army radio, predicting that Hezbollah would end with "its tail between its legs."
Trade Minister Eli Yishai issued a stark warning to Lebanon even if the ceasefire comes into force, saying: "If a single stone is thrown at Israel from whatever village, it should be turned into a pile of stones."
Clashes near Baalbeck
Israeli air strikes on the village of Brital in eastern Lebanon killed at least seven civilians and wounded 35.
Paramedics said more people were still buried under the rubble after the air raids shortly before midnight (local time).
At least four people were killed and 20 wounded in two Israeli air raids overnight near the ancient city of Baalbeck in eastern Lebanon.
The first raid hit a two-floor house in the Lebanese village of Taibe while the second targeted a building believed to be linked to the Hezbollah movement at war with Israel.
Lebanese Red Cross workers pulled four bodies from the rubble and 20 more were taken to a hospital in Baalbeck.
In Tyre, Israeli warplanes bombed five petrol stations, sparking a huge fire that threatened to engulf a nearby hospital.
"The flames are lashing the building, our ill and wounded patients are threatened with smoke inhalation," hospital director Jawad Najm told AFP. "Nobody has come to help. Not the firefighters, not neighbours."
Fierce clashes between Hezbollah and Israeli troops continued through the day southeast of Tyre, on the outskirts of the bombed-out militant stronghold of Khiam.
The International Committee of the Red Cross has slammed the continuing heavy civilian casualties.
“It is unacceptable that after more than 30 days of ongoing military operations, all necessary precautions to spare civilian life and those engaged in medical work have still not been taken," it said in a statement.
In addition to the heavy death toll in Lebanon, more than 900,000 people have been displaced by Israeli bombardments that have destroyed thousands of homes, dozens of bridges and hundreds of kilometres of roads.
The Israeli general heading the northern command said he hoped the expanded offensive would have secured control of most of south Lebanon by Monday.
"I think we will be in a much better situation (on Monday) than we are today," General Udi Adam said. "Assuming that the ceasefire will take effect, we will stop the moment we are told. If it doesn't, we could continue."
The Litani River has served as a tactical boundary for Israel's operations in Lebanon since it first invaded its northern neighbour in 1978, leading to a long and bloody occupation that ended only six years ago.
UN resolution
The UN resolution, unanimously adopted Friday by the Security Council, calls for a full cessation of hostilities and the deployment of a 15,000-strong international force in southern Lebanon.
Morocco, Indonesia, Italy, Turkey, Spain and Malaysia have already agreed to send troops to bolster the UN force there but Australia is still to make a decision on whether to take part.
The UN resolution also calls for the release of the two captive Israeli soldiers whose seizure on July 12 triggered the conflict, and for a solution to the issue of Lebanese prisoners held by Israel.
While approving the resolution, the Lebanese cabinet expressed reservations that it did not go far enough in condemning the large-scale Israeli destruction and that it failed to address the issue of the Israeli-occupied Shebaa farms.