Clashes came after residents tried to smuggle goods, say reports
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Egyptian guards shot dead a Palestinian man at the Egypt-Gaza border hours after Israeli troops withdrew from the area, Palestinian witnesses said.
However, an Egyptian spokesman has denied that his country's forces fired the shots that killed the man.
Hundreds of Palestinians had poured into the buffer between Gaza and Egypt.
Before the shooting, there were joyous scenes in Rafah as residents were reunited with relatives living on the Egyptian side.
The Palestinian witnesses say Egyptian forces opened fire to disperse crowds of Palestinians and Egyptians swarming across the border both ways.
A Palestinian man in his 30s died of a gunshot wound to the head, they said.
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This is not just the beginning, this is victory. All the people are happy
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Israel withdrew after agreeing to the deployment of an Egyptian force to control the border area.
The Rafah crossing - which Israel says will remain closed for six months - is Gaza's main link to the outside world. An alternative crossing out of Gaza will be open at Nitzana.
Palestinian 'victory'
A large Israeli force used to guard the area, which has two high walls splitting the town of Rafah into two halves.
The town is known as an area for smuggling weapons and other contraband from Egypt into Palestinian territory through dozens of tunnels.
Young and old had clambered over obstacles to meet relatives
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Civilians climbed over the walls using ropes and armed militants took positions on top of the structures.
"My mother wanted to come as well but she wasn't able to climb the ropes," said Mohammed Salem, 18, who climbed over two walls to reach the Egyptian side of Rafah.
"This is not just the beginning, this is victory. All the people are happy."
Egyptian border guards initially stood by as people were helped over the barriers, while one section of wall reportedly collapsed under the pressure, allowing dozens to enter no-man's land.
The deployment of 750 Egyptian troops is heaviest security presence agreed by Israel in the Sinai region since the 1979 Camp David peace treaty.
Conflict remains over control over the Rafah border crossing.
Israel is said to want the crossing point to be moved to Kerem Shalom in Israeli territory on the intersection between Egypt, Gaza and Israel, where it can monitor movements.
Palestinians say the Israeli occupation of Gaza will not be over unless it relinquishes exclusive control of the territories land and sea borders and its airspace.