"This is a preparation for the declaration of the Palestinian state," said Mr Arafat, smiling broadly as he welcomed the first flights.

BBC's Paul Adams: "For Palestinians, the stuff of dreams"

Thousands of Palestinians celebrated the arrival of planes at Gaza International airport from Egypt, Morocco, Jordan, Spain, the European Union and two Palestinian Airlines flights.

The first plane to land was an Egyptian airliner carrying more than 70 Egyptian officials, government ministers and celebrities.

It touched down to the cheers of dozens of dignitaries waiting on the ground.

Greeting the crew from the first Palestinian plane to arrive, Mr Arafat said: "You are a beautiful sight."

He said the successful opening of the airport was tangible proof that the Middle East peace process was working, thanks to the recent Israeli-Palestinian agreement at Wye River.

Symbol of sovereignty

Palestinian official Nabil Shaath: "This is a symbol of our sovereignty"

The official in charge of the project, Nabil Shaath, told the BBC that the airport would enable Palestinians not to have to endure the agony and humiliation of travelling through Israel.

"This is really a window for the Palestinian people to the outside world. This is a symbol of our sovereignty and an open economy," he said.

The $250m airport has been ready for a year, but an agreement allowing it to open was not signed until last week.

Our Middle East Correspondent Paul Adams says of all the fruits of last month's Wye memorandum, the opening of Gaza's international airport is perhaps the most symbolically charged.

For Palestinians living in the small, overcrowded Gaza Strip, which is ringed by the Mediterranean on one side and by barbed wire on the other three, it is seen as a gateway to the outside world.

In the past, Palestinians wanting to fly abroad needed permission to enter Israel and fly out of the international airport near Tel Aviv.

Israel rarely granted permission and forced Palestinians to use Israeli-controlled land routes to Egypt or Jordan to catch flights.

Israeli security

But the independence the airport gives Palestine is heavily qualified.

Israeli officers will maintain control over security, as they do at crossing points into Egypt and Jordan, deciding who comes and goes.

Aircraft from countries still formally at war with Israel - such as Syria - will not be allowed to land.

However, the airport is still being seen as a commercial lifeline.

Airport officials say they expect to handle up to 700,000 passengers a year and welcome aircraft as large as a jumbo jet.