The Israeli army said on Thursday that the soldiers were withdrawing from Shijaya district, which it first raided late on Saturday.
Palestinian emergency officials said the Israeli soldiers killed a total of 18 Palestinians in air strikes and gun battles.
The Israeli army also released footage and photos of what it described as a tunnel dug by Palestinian armed groups from Shijaya to the Karni crossing, the main cargo crossing between Gaza and Israel.
The army said the tunnel, which was 13m deep and 150m long and was reinforced with wooden beams, was to be used for an attack on Israeli soldiers at the crossing.
Meanwhile, an Israeli army force raided the occupied West Bank city of Nablus on Thursday morning and killed a leader of the al-Aqsa Martyrs' Brigades, a group allied with Fatah.
Witnesses said the Israeli force entered the Old City of Nablus after 2am and ambushed a group of fighters, killing the leader, Fadi Kafishe, and wounding six other people in a gun battle.
The army said it was on a routine operation in Nablus when armed groups fired at the troops, who returned fire and identified hitting one person.
In Gaza, unidentified assailants killed a local leader of the Popular Resistance Committees group in the Gaza Strip on Thursday, hospital workers said, in an apparent resurgence of internal violence.
Raed al-Nhal was shot in Beach Refugee Camp near Gaza City and died of his wounds, they said. No group claimed responsibility.