Thousands of Palestinians have crossed from Gaza into Egypt via the ruined border fence at Rafah for a second day.
Hundreds of Egyptian security personnel have moved into the area but are so far making no attempt to stem the traffic.
Tens of thousands of people streamed across the border on Wednesday after militants destroyed long stretches of the border fence.
In recent days Israel has tightened its blockade on Gaza, which is run by the Islamist Hamas movement.
The BBC's Ian Pannell, reporting from the Egyptian border town of Rafah, says Egyptian security forces have now begun trying to exert some measure of control.
Reinforcements have gathered on roads leading to Rafah, and police are now stopping and questioning some Palestinians.
However, our correspondent says Rafah itself is if anything even busier than Wednesday, when at least 50,000 Gazans crossed the border.
He says there are so many Palestinians in Rafah that it is almost as if the town has been annexed by Gaza.
The main street has become an enormous open-air market, selling all kinds of goods, including fuel, goats and other livestock, and cigarettes.
Egyptian security forces are starting to make their presence felt
Some complaints are now emerging that prices have risen so much that some items are available more cheaply in Gaza.
Egyptian resident Ashraf el-Sayyid told the Associated Press news agency: "The Palestinians left us with nothing. It's true, they are dear to us, but today, they were like locusts."
Israel closed most crossing points into Gaza in June after Hamas seized control of the Gaza Strip.
17 January: Israel seals border following rise in rocket attacks
20 January: Gaza's only power plant shuts down
22 January: Israel eases restrictions
22 January: Egyptian border guards disperse Palestinian protest against closure
23 January: Border wall breached
The Israelis tightened the measures last week, after a rise in rocket attacks from Gaza.
Correspondents say the big question now is what happens next.
On Wednesday, Israeli Prime Minister Ehud Olmert said he would not let the Gaza blockade turn into a humanitarian crisis.
But he said he could not allow Gazans to live normal lives while people in southern Israel were under rocket fire.
Mr Olmert made no direct reference to the border breach in his speech.
But foreign ministry spokesman Arye Mekel told the BBC Israel was worried that militants would take the chance to smuggle in men and weapons.
And he blamed Hamas itself for the plight of Gazans: "All they have to do is stop firing the rockets towards Sderot and other places in Israel, and immediately there will be no problem with the border crossing," he said.
Israel wants Egypt to take control of the border.
But there is a great deal of sympathy in the Arab world for Gazans under the Israeli blockade.
President Hosni Mubarak said on Egyptian television: "We are doing our best to help end the Palestinians' suffering, to help end the Israeli measures of mass punishment and to return fuel, electricity supplies and humanitarian aid to the Gaza Strip."
Egypt has said it will not use force to send the Gazans back.
Foreign ministry spokesman Hossam Zaki said the border would be closed again when all the Palestinians had returned.
Internationally, the UN Security Council is due to meet on Thursday for the second time in three days to try to agree a statement calling for an immediate end to violence in Gaza and southern Israel.
And the UN's top human rights body, the Human Rights Council, passed a resolution condemning Israeli military action and demanding an end to the Israeli military blockade of Gaza.
Most Western states did not take part in the vote.