More than 1,500 Palestinians have crossed freely from Gaza into Egypt via a border point controlled for the first time by Palestinian officials.
People surged forward to get their passports checked
Saturday was the first day Palestinians could use the reopened Rafah crossing - a vital gateway to the outside world for the Gaza Strip's economy.
Israel held the border station for nearly 40 years but ceded control to Palestinian forces after it withdrew.
The crossing reopened under the European Union's supervision.
Israeli forces continue, however, to keep a video watch from a nearby base and retain control over the movement of all goods and trade in and out of Gaza.
They will be able to raise objections if they believe that Islamic militants or anyone else crossing into Gaza pose a security threat to Israel.
While Rafah was opened for only four hours on Saturday, it will eventually operate round-the-clock.
The BBC's Alan Johnston in Gaza notes that Palestinians had always hated having to pass through Israeli checks at the frontier, where they were often subjected to delays and questioning.
'Gateway to freedom'
EU representative Mark Otter declared himself happy with the operation on the first day, and told the Palestinians that their taking control of the crossing was symbolically significant:
GAZA CROSSINGS DEAL
Palestinians in charge of crossing, but authority limited
EU monitors have power to detain individuals and vehicles
Israel can watch crossing on television screens
Israel can object to particular travellers, but cannot veto passage
Imports from Egypt must go via Israeli checkpoint at Kerem Shalom
Palestinian bus convoys between Gaza and West Bank from December, and lorry convoys from January
Gaza sea port to be constructed
"You are slowly acquiring all the prerogative of your sovereignty, of your future Palestinian state and your freedom that you deserve," he said.
A new banner at the terminal read: "Rafah crossing: the gateway to freedom."
Hundreds of people - some of whom had slept there for days - had gathered hoping to be among the first to cross the border.
"Today is a day of happiness for every Palestinian, the suffering is coming to an end," traveller Ali Qahman told Reuters news agency.
Among the first to cross was wheelchair-bound mother Naimeh Bayah, travelling from Jabaliya refugee camp to Egypt for surgery.
"I am so tired, but happy, because I made the crossing as a human being for the first time," she said.
"I had travelled before and I had to wait hours before getting in."
On Friday an official opening ceremony was attended by Palestinian leader Mahmoud Abbas and foreign officials.
Gaza has no sea port and Israel has not agreed to allow its international airport to re-open, so the Rafah border is Gaza's main gateway.
Israel closed the Rafah crossing on 7 September shortly after withdrawing from Gaza, citing concerns that it would be used to smuggle weapons and militants from Egypt.
The Israelis had opposed the reopening until US Secretary of State Condoleezza Rice secured a deal during a visit to the region earlier this month.