The raid triggered unprecedented Palestinian reprisals against foreigners, because British wardens - who along with American monitors had supervised the Jericho prisoners under an unusual 2002 arrangement - left their posts just before Israeli troops arrived on Tuesday.
Gunmen vandalized Western offices and kidnapped 11 foreigners, including an American university professor. By Wednesday afternoon, all had been released.
Palestinian President Mahmoud Abbas cut short a European trip and called the raid an "unforgivable crime" and "an insult to the Palestinian people" as he toured the demolished complex.
Abbas suggested there was close coordination between foreign inspectors and Israeli forces. Abbas said Israeli troops arrived 10 minutes after foreign monitors left Jericho. Pressed to elaborate, he said: "I'm giving the facts. They (the monitors) left at 9:20 am, and the Israelis came in at 9:30 am. How can we explain that?"
The Israeli raid made Abbas appear increasingly weak to his people.
"This was a severe blow to the Palestinian Authority and to Abu Mazen (Abbas) personally," said Palestinian negotiator Saeb Erekat, who was accompanying him.
The raid came at a time when Abbas is wrangling over the division of powers with the Islamic group Hamas, which is poised to form a new government this month. In the West Bank city of Nablus, hundreds chanted anti-Abbas slogans.
In all, more than 300 Palestinians were detained, and the Israeli military said all but 38 had been released by Wednesday, including many policemen stationed at the jail.
"This was a severe blow to the Palestinian Authority and to Abu Mazen (Abbas) personally"
Leader of the People's Front for the Liberation of Palestine (PFLP) Ahmed Saadat and five other top prisoners were questioned on Tuesday night at a small army base near Jericho.
Israeli acting prime minister Ehud Olmert on Wednesday said that the six PFLP prisoners "will be indicted according to Israeli law and they will be punished as they deserve".
Four of the six believed to be directly involved in the 2001 assassination of Israeli Tourism Minister Rehavam Zeevi were convicted in the past by a Palestinian court, and Israeli legal experts said earlier on Wednesday it was not clear whether they can be tried again.
Outgoing Palestinian Foreign Minister Nasser al-Kidwa said Israel would violate international law by trying the six, but did not explain.
British Prime Minister Tony Blair defended the withdrawal of British monitors, saying it came after careful consideration and months of warnings about problems at the jail.
"The idea that this was ... uncalled-for or not thought through is simply wrong," he said in his weekly House of Commons question session on Wednesday.
The siege came just two weeks
before Israeli general elections
Abbas acknowledged that the foreign monitors had informed him of their intention to leave, but said they did not give a departure date.
On Wednesday, Palestinians closed shops across the West Bank and Gaza to protest the raid, amid an outburst of anti-Western sentiment. In Gaza, schools opened, but most students left early in a show of protest. Nablus residents observed a general strike.
Tuesday's daylong siege came just two weeks before Israel's general election and boosted acting Prime Minister Ehud Olmert's image as a tough-minded leader. Defence Minister Shaul Mofaz, a member of Olmert's centrist Kadima Party, dismissed allegations by Palestinian officials and critics at home that the operation, which involved some 1000 troops, was timed to win over hardline voters.