About 15 Palestinians, not affiliated to any resistance movement, seized the office of governor Husni Zurub in Khan Yunis early on Sunday and expelled most of the 22 workers in the building.
The protesters, calling themselves Fighters of the al-Namsawi Neighbourhood in Khan Yunis, later reached an agreement with the governor, representatives of the general emergency committee and chief of police, Aljazeera's correspondent reported.
A spokesman for the group, Abu Majahid, told Aljazeera that it was agreed that all affected families in the al-Namsawi neighbourhood would be compensated, the area would be considered a damaged zone and all homeless citizens whose homes have been demolished by Israeli occupation forces would be compensated.
Scores left homeless
Israeli occupation troops destroyed two apartment buildings in Khan Yunis last Thursday, leaving scores of families homeless, Palestinian residents said.
Israel said the buildings had been used for cover by resistance fighters and were largely uninhabited.
"We need homes for the homeless," Mujahid said earlier.
He said 160 families had been made homeless by the destruction of the apartments and previous Israeli raids in the al-Namsawi district.