The deal was announced after a meeting between US President Donald Trump and Russian President Vladimir Putin at the G20 summit. SOHR says truce is holding since it came into effect at noon local Syrian time.
A US-Russian brokered ceasefire deal for southwestern Syria took effect at noon (0900 GMT) on Sunday, the latest international attempt at peacemaking in the six-year war.
The US, Russia and Jordan reached a ceasefire and "de-escalation agreement" this week with the aim of paving the way for a broader, more robust truce.
The announcement came after a meeting between US President Donald Trump and Russian President Vladimir Putin at the G20 summit of major economies in Germany.
The Syrian Observatory for Human Rights, a Britain-based war monitoring group, said "calm was prevailing" with no air strikes or clashes in the southwest since the truce began at noon (0900 GMT) on Sunday.
"The situation is relatively calm," said Suhaib al-Ruhail, a spokesman for the Alwiyat al-Furqan rebel group in the Quneitra area.
Another rebel official, in Deraa city, said there had been no significant fighting.
It was quiet on the main Manshiya front near the border with Jordan, which he said had been the site of some of the heaviest army bombing in recent weeks.
TRT World's Nick Davies Jones reports from Gaziantep.
No warplanes seen
A witness in Deraa said he had not seen warplanes in the sky or heard any fighting since noon.
Several ceasefires have crumbled since the onset of the conflict and it was not initially clear how much the combatants - Syrian regime forces and the main rebels in the southwest - were committed to this latest effort.
With the help of Russian air power and Iranian-backed militias, Syrian regime led by Bashar al-Assad has put rebels on the back foot over the last year.
Earlier talks between the US and Russia about a "de-escalation zone" in southwest Syria covered Deraa province on the border with Jordan, nearby Sweida and Quneitra which borders the Israeli-occupied Golan Heights.
A senior State Department official involved in the talks said further discussions would be necessary to decide crucial aspects of the agreement, including who will monitor its enforcement.
Russian Foreign Minister Sergei Lavrov said the deal includes "securing humanitarian access and setting up contacts between the opposition in the region and a monitoring centre that is being established in Jordan's capital."
TRT World spoke to the residents of Deraa to find out what they think about the latest ceasefire.
The UN Deputy Special Envoy for Syria said on Saturday the deal was a "positive development" ahead of the latest round of UN-sponsored peace talks to begin in Geneva on Monday.
Western-backed rebels control swathes of Deraa and Quneitra, which are home to tens of thousands of people and form a centre of the insurgency south of the Syrian capital Damascus.
With the help of Russian air power and Iranian-backed militias, the Syrian regime led by Bashar al-Assad has put rebels on the back foot over the last year.
A wide array of rebels backed by other countries have been putting up fight against the regime since the civil war began in Syria in 2011 following Assad forces' crackdown against pro-democratic and opposition protesters.