A spokesman for European Union security monitors at the main border crossing of Rafah said operations would resume at 3.15pm (1315 GMT). The monitors had been temporarily withdrawn shortly after the standoff began on Friday morning.
Gazan policemen incensed at the death of a fellow officer in a clan clash had blockaded the border with Egypt, prompting European Union monitors to withdraw in a fresh blow to the Palestinian Authority's efforts to curb chaos.
Already busy searching for three Britons abducted nearby on Wednesday, officials scrambled to defuse the standoff at the Rafah terminal, whose opening last month was hailed as a step to make the Gaza Strip a testing ground for Palestinian statehood.
Witnesses said policemen, backed by armed men from the ruling Fatah faction led by Mahmoud Abbas, the Palestinian president, prevented vehicles from reaching the Rafah crossing. They fanned out in the terminal, forcibly ejecting would-be travellers.
The policemen were angered by the death of a fellow officer in a clash with a Gaza clan on Thursday, the witnesses said.
Al-Aqsa Martyrs Brigades, an armed group aligned to the Fatah, called on Abbas to sack Nasser Youssef, the interior minister, and Ala Hosni, the police chief, accusing them of failing to rein in Gaza chaos.
The crossing is supervised by
"Know that we will take decisive measures. The first step has been closing the Rafah crossing," the group said in a statement that was also signed by several policemen.
A spokesman for the EU security monitors stationed at the Rafah terminal said all personnel withdrew to Israel while the PA tried to end the blockade.
The crossing was opened last month under a deal brokered by Condoleezza Rice, the US secretary of state, in hope of reviving the Gaza economy and efforts to end five years of fighting with Israel.
But the initial optimism dimmed with a surge of violence that shows little sign of abating. On Sunday, a "period of calm" declared by Palestinian fighters at the urging of Abbas is set to expire.
Palestinians accuse Ariel Sharon, the Israeli prime minister, of stoking unrest by expanding Jewish settlements in the West Bank, where they seek statehood along with Gaza.
Sharon, favourite to win the general election on 28 March, has pledged to keep major West Bank settlement blocs but hinted that isolated settlements could be removed under a peace accord.
The Israeli army said on Friday it had dismantled three West Bank outposts erected by Jewish settlers.
A spokeswoman for the settlers said the outposts would be restored, and that at least 18 more remained untouched.
An Israeli military source said there were no more than 10 remaining.
Relatives weep at the funeral of
a Palestinian victim of the attack
In other news, the Palestinian group Islamic Jihad has claimed responsibility for a bombing that killed an Israeli soldier and two Palestinian bystanders, besides the bomber, in the occupied West Bank.
Suhaib Ajami, 19, was named over loud speakers in the nearby village of Attil as the bomber responsible for Thursday's attack.
Islamic Jihad has helped to spearhead a Palestinian revolt that was launched in the West Bank and Gaza Strip in 2000.
The Israeli army said on Friday it had arrested 10 Palestinians suspected of being linked to the bomber.