The scale of the destruction in the town of Rafah in southern Gaza has become apparent after Israeli troops pulled out of two key areas.
The UN estimates at least 1,600 people have lost their homes
During their three-day raid Israeli troops demolished homes and ripped up streets; the local zoo lies in ruins.
The BBC's Gaza correspondent says local residents, who are venturing onto the streets once more, are furious.
Israel says the incursion, in which at least 40 Palestinians died, was aimed at destroying arms-smuggling tunnels.
Meanwhile a senior World Health Organisation official has expressed concern about the health services in Palestinian areas, saying they could be on the brink of collapse.
Dr David Nabarro said the current security crisis and restrictions on movement had left vulnerable people in the Gaza Strip and West Bank at greater risk of malnutrition and disease.
The Israeli army insists its latest operation in Gaza was aimed only at demolishing houses that were concealing tunnels used to smuggle weapons from Egypt.
Israeli sources indicated that the army's hunt for illicit tunnels in Gaza would continue despite the pullback.
Most of the Israeli tanks left the Tel Sultan and Brazil neighbourhoods at daybreak on Friday, residents said.
The BBC's Gaza correspondent, Alan Johnston, says the Israeli troops occupied the north side of the Brazil neighbourhood for just one day, but what they did during that time will be remembered for many years.
A large olive orchard has been destroyed; there is not a tree left standing, and every street around it has been churned up by the tanks, our correspondent says.
The tarmac has been stripped from the roads and the front of shops sheared off by the passing heavy armour, our correspondent adds.
Along with the demolished homes the only zoo in the Gaza Strip has been ruined. Most of the nearly 80 animals have either escaped or been killed.
The offensive was launched after 13 Israeli soldiers were killed by Palestinian militants in the Rafah area last week.
The local leader of the radical Hamas movement died in an Israeli missile strike, Palestinian medical sources said. And as Israeli forces moved deeper into Rafah, trading fire with gunmen the death toll mounted.
Rafah's mortuary overflowed and many of the dead have had to be stored in freezers in different parts of town.
Following the violence on Wednesday the UN Security Council adopted a resolution condemning the deaths and demolitions.
The UN says recent house demolitions in Rafah by the Israeli army have left about 1,600 residents homeless.
The resolution, which was adopted by 14 votes to 0, also urged Israel not to demolish homes in violation of international law.
The US, which usually vetoes anti-Israeli resolutions, abstained from the vote.