Palestinian leader Mahmoud Abbas has sent bulldozers to demolish buildings put up illegally in Gaza City in the start of a crackdown on lawlessness.
The first shanties bulldozed were actually put up by security forces
Many buildings have been illegally built on public land by militants, security men and unlicensed traders.
About 200 Palestinian policemen were on the streets to protect the bulldozers.
Meanwhile, Palestinian officials said their forces would be deployed across southern Gaza by mid-week, in a move to prevent rocket attacks by militants.
Cabinet minister Saeb Erekat said Israeli and Palestinian generals would meet later to complete the plan for the deployment, with officers expected to take up their positions within 24 hours of its approval.
'State of chaos'
The demolition of hundreds of buildings erected without permits in Gaza City is likely to be seen as a step towards Mr Abbas' election promise to restore the rule of law in Palestinian territories.
Orders to remove such structures were largely ignored in the "state of chaos" of the last years of Yasser Arafat's leadership, municipal police official Musa Alian told the Reuters news agency.
"We are now beginning a new era in which law must be respected and all government lands returned," he said.
Dozens of police were deployed to secure the operation
A string of cafes, shops and security men's kiosks on Gaza City's beach road were the first to be bulldozed, prompting calls by their owners for compensation.
Correspondents said the operation was redolent of the Israeli military raids in which hundreds of Palestinian buildings have been destroyed by armoured bulldozers during the four-year intifada or uprising.
The bulldozers began with buildings put up by security men in a possible effort to defuse public protest, correspondents said.
Up to 3,000 Palestinian police began patrolling the northern half of the Gaza Strip, mainly along the border with Israel, over the weekend.
The militant groups have promised to suspend attacks on Israel, provided the Israeli military also halts operations.