It started with "shock and awe" at 7.30pm on 27 December as flares lit up the skies and 100 tons of bombs rained down on the Gaza Strip in the space of 24 hours. Israel declared it was time to put an end to the Hamas rockets terrorising its people, as the world's leaders enjoyed a Christmas break.

It ended with a fragile ceasefire shored up by the international community after a three-week military campaign that resulted in the deaths of 1,300 Palestinians and 13 Israelis - and calls for an investigation into alleged Israeli war crimes.

The Israeli prime minister said his country's military goals had been achieved, and Hamas, which was still able to fire its rockets yesterday, declared a "great victory". But there were fears that the Israeli offensive, which was halted only two days before the inauguration of Barack Obama as US president, may have created a new generation of Palestinian radicals in the rubble of the Strip. The prospects of a peace deal between Israeli and Palestinians may be even more remote than ever.

The timing of Operation Cast Lead, which sent tanks crashing into the northern Gaza Strip while Israeli F16s dropped their payloads on Saturday 27 December, must have seemed propitious to the Israeli leaders as they prepared for an election in February. George Bush, Israel's staunch supporter, would not lift a finger to halt the offensive and still had three weeks in office as a lame duck president.

Barack Obama, the president-elect, was consumed by the economic meltdown and sticking to his mantra that in foreign policy there could only be "one president at a time". European leaders were out of the office.

Domestically the lame duck prime minister, Ehud Olmert, had nothing to lose from a Gaza assault after his last disastrous war on Hizbollah in 2006, and Foreign Minister Tzipi Livni had been gaining in the opinion polls over her hawkish opponent Benyamin Netanyahu by promising to topple Hamas. The Defence Minister, Ehud Barak, the Labour party leader, also saw an opportunity to improve his poll ratings.

The first reactions as the Israeli bombs fell on Gaza, killing 225 people in the initial hours according to Palestinian medics, gave Israel no reason to be deterred. The first day, the US and UK placed the blame for the Israeli attacks on Hamas and called on the militants to cease all rocket attacks immediately. It was only on 28 December, after a four-hour UN Security Council session, that the British government called for an immediate end to "all violence" while the French president, Nicolas Sarkozy, condemned the "disproportionate" onslaught. The US agreed with Israeli statements that Israel was acting in "self defence".

With the attacks playing positively in Israeli public opinion, the Israelis deployed their formidable PR weapon as the world scrambled to react. Ministers, ambassadors and spokesmen sent out the message that the government had decided that "enough was enough" after Hamas stepped up its rocket attacks against Israeli towns and declared the end of a six-month ceasefire. Mr Olmert's spokesman Mark Regev noted that the squeals of protest from the international community were not opposed to Israel's targeting of Hamas militants but against the humanitarian costs. With journalists barred from the territory, it was left to Hamas to highlight the civilian casualties even as it continued to fire its missiles against Israeli cities while the 1.5m residents of the Strip were pounded by the bombing campaign.

On 28 December, a medium-range Grad missile struck the Israeli town of Ashdod, the furthest ever inside Israel, heightening fears among the Israeli civilian population. On the same day, Israeli warplanes concentrated their fire power on the network of tunnels - possibly as many as 300 - supplying the Gaza Strip with weapons and commercial goods from Egypt.

The government denied that it sought to overthrow Hamas. But international suspicions were heightened when the occasional Israeli official would break ranks to say that the goal was to overthrow the Iranian-backed Islamic militants bent on the destruction of Israel, and when it was revealed that Israeli military preparations had been underway for the last six months.

On 29 December, the home of the Hamas prime minister Ismail Haniyeh was razed by an Israeli bomb as the campaign targeted the symbols of the besieged Islamists' power, by bombing a mosque and an Islamic university. But the first Israeli soldier was killed near a border crossing, and a civilian was killed in Ashkelon as the Hamas missiles struck deeper into Israeli territory. The next day the Hamas rockets thrust still deeper, striking Beersheba for the first time.

The diplomatic machine kicked into gear. On 30 December, in the dying days of its EU presidency, France demanded a 48-hour "humanitarian truce" as the Palestinian death toll reached 400 and summoned a meeting of EU foreign ministers who agreed on a ceasefire call. On the same day the Middle East Quartet - grouping the US, UN, EU and Russia - agreed on a ceasefire call. Until that moment the Bush administration had failed to call on both sides to immediately halt hostilities, and soon reverted to its demand that echoed Israel's insistence on a "sustainable" ceasefire that would silence the Hamas rockets for ever.

But Israel decided to press on saying that it had not yet achieved its war aims.

In the days that followed, Israel kept up its relentless campaign by land, air and sea, pushing deeper into the Gaza Strip after cutting it in two, and benefiting from the lack of a united international response as a series of envoys shuttled around the region. On 3 January, Israel launched its long-awaited ground offensive as troops entered the northern part of the Strip.

On 5 January, at least 30 members of the extended Samouni family in the Gaza City district of al Zeitoun were killed by Israeli tank shelling. Neighbours said they were ordered to seek shelter in their compound by Israeli forces. Four children were discovered lying by the bodies of their dead mothers two days later by the International Committee of the Red Cross, which accused Israel of "unacceptable" delays in allowing medics access to the wounded.

It soon became clear that Egypt, Israel's trusted negotiating partner with Hamas in the past, was prepared to risk accusations from its Arab rivals that it was "selling out" to Israel by mediating again with the Islamists whose leaders in Gaza had gone underground. After President Sarkozy flew into Cairo from Syria, where the senior Hamas leader, Khaled Meshaal, resides under Syrian protection, he and the Egyptian President, Hosni Mubarak, announced an initiative on 6 January that became the basis for the deal that eventually produced the ceasefire.

With the Palestinian death toll standing at 600, President Mubarak proposed an immediate truce between Israel and the Palestinians in Gaza, to be followed by talks on long-term border security and an end to the Israeli blockade of the Strip. The Egyptians also pressed for Hamas to be reconciled with its bitter rival Fatah which the West insists is the only way to lay the groundwork for a future two-state solution with Israel.

The initiative came on the same day that Israeli artillery shells killed 40 people at a UN school, in Jabalya refugee camp, where hundreds of people were sheltering from the Israeli blitz. Israel was forced to retract accusations that militants had fired first from the school courtyard.

But Mr Sarkozy's triumphant announcement the following day that Israel had agreed to the truce proved premature.

Foreign ministers from the moderate Arab states, their streets teeming with anti-Israeli protesters, headed to New York and insisted that the UN security council deliver a resolution demanding a ceasefire. On 7 January, Israel agreed to the first daily three-hour ceasefire during which the wounded could be brought out while the besieged local residents could venture out and seek supplies or return to the remains of their homes.

On 8 January, rockets fired from southern Lebanon injured two Israelis in northern Israel, prompting short-lived fears of a second front opening up from the region controlled by Iran's Hizbollah allies.

The same night, after two days of tense negotiations brokered by Britain, in which the US had strenuously resisted a legally-binding ceasefire resolution, the security council spoke. But the United States abstained, after an 11th hour telephone call from President Bush to his secretary of state, Condoleezza Rice, just as she was about to enter the Council chamber to vote in favour. The president picked up the phone after Mr Olmert delivered a personal ultimatum warning him that Israel remained opposed to any such resolution.

But any hopes raised by the UN security council were dashed the following day when the fighting resumed between Hamas forces and the Israeli army as ferociously as before.

On Saturday, 10 January, with more than 800 Palestinians killed, hundreds of protesters clashed with police outside the Israeli embassy in London for the second time during a demonstration demanding a ceasefire, and 15 people were arrested.

The following Monday, Israeli ground troops entered Gaza City, where there were reports of fierce fighting. Last Thursday, UN headquarters were struck by Israeli artillery shells that set the building ablaze. UN officials accused Israel of illegally using white phosphorus, although the Israeli military denies using "illegal weaponry."

The UN secretary-general, Ban Ki-Moon, who had joined the international search for peace, condemned the attack and told Israeli leaders that its campaign, which had killed hundreds of Palestinian children, was "unbearable." He received an apology from Prime Minister Olmert for the mistaken targeting of the UN compound.

The endgame was in sight. It would take another three days – and the assassination of Hamas' powerful security chief Said Siyyam – before the Egyptian initiative would achieve a breakthrough. On Friday, Ms Livni ruffled Egyptian feathers by making a lightning journey to Washington for the signing of a memorandum of understanding providing for US help on the Gaza-Egypt border in halting Palestinian weapons smuggling – a key Israeli condition for halting the war.

But by Sunday, when eight European and Arab leaders gathered in the Egyptian resort of Sharm el Sheikh to pledge their support for a durable peace and the rebuilding of Gaza, the guns had fallen silent. Israel's unilateral ceasefire was followed by Hamas announcing a truce.

Gazans, trapped inside the Strip by an Israeli blockade since the Hamas takeover, emerged again from their homes and began digging bodies from the rubble. But still they did not dare to hope.

According to Israeli military intelligence, only a few hundred of the 20,000 Hamas fighters were killed and they retain much of their rocket capabilities.

Mr Netanyahu, who is expected to emerge as prime minister after next month's election, said: "the Israel Defence Forces have dealt Hamas a severe blow, but unfortunately the job has not been completed."