Israel declares ceasefire, Hamas continues firing, Israel defends itself. As long as the Israeli troops don’t withdraw yet this is propaganda. Egypt is rejecting the Israeli cease fire saying Israel needs to withdraw as a condition of any cease fire. There may be more to this than meets the eye. Or Olmert could be a complete and utter fool. History will tell.
The cease fire is tactical stand down to allow Hamas to reveal itself. You cannot shape the battlefield if you don't know where it is.
Withdrawal is not an option. Credit Hamas for being smart enough to see this "cease fire" for what it is, let's see if (hopefully) they'll come out and fight (and die) some more.
In any case Israel needs to reload and rest its fighters.