Gaza divisional commander General Avi Kochavi left through the metal gates on the Kissufim crossing on Monday where military bulldozers immediately dug up mounds of earth to block the entrance.
"The mission is completed and an era is over," said Kochavi in a brief speech at the crossing. "From now on, the responsibility for what happens in the Gaza Strip lies in the hands of the Palestinian Authority."
Palestinian security forces overnight entered the 21 former Jewish settlements that had illegally sprung up across Gaza since the territory was seized by Israel in the 1967 Six Day War.
Palestinian President Mahmoud Abbas described the pullout, the first Israeli withdrawal from occupied Palestinian territory, as "a day of joy, the likes of which the Palestinian people have not known for a century".
Still work to do
However, Abbas also told Aljazeera that much work was needed to turn Gaza into a viable territory, especially ensuring that Palestinians in Gaza be allowed contact with the outside world.
Abbas stressed that the Rafah border crossing with Egypt, which may be closed for the next six months, should be opened as soon as possible to stop Gaza "turning into a big jail".
Palestinians celebrate Israel's
pullout near Kissufim crossing
The Palestinian Authority has welcomed the reopening of roads within the territory but stressed that Gaza Strip should be connected to the West Bank, said Shireen Abu Aqla, Aljazeera's correspondent in Palestine.
Initial reactions to the end of occupation were of extreme joy, with Gaza City witnessing numerous celebrations, Abu Aqla said.
Using roads that had previously been blocked off to them, Palestinians celebrated inside the former colony at Netzarim in central Gaza.
This settlement - which had had effectively cut the territory in two by restricting use of the main road that runs from north to south - had been particularly detested.
Plans by Palestinian police to bar crowds from the settlements quickly disintegrated, and resistance groups hoisted flags and fired wildly into the air.
By midday, the situation had calmed, and curious Palestinians quietly toured the abandoned settlements, as feelings of newfound freedom began to sink in.
Air of freedom
"Since last night, I have been in the street, for no reason, just to breathe the air of freedom," said Samir Khader, a farmer in northern Gaza who needed Israeli permits to go in and out of his village, flanked by Israeli settlements.
"I don't know what the future will bring, but at least, I can come in and out of my house at any time."
Palestinians fix a Hamas flag on an
abandoned synagogue in Kfar Darom
Palestinians hope to build their state in Gaza, the West Bank and east Jerusalem but fear Tel Aviv will not hand over additional territory.
Many say Israel's occupation of Gaza has not ended because it retains control over borders and the air space.
Nevertheless, residents said a festival will be organised in the former settlement of Neve Dekalim on Tuesday or Wednesday.