Israel's new defence minister has ordered the main cargo crossing with the Gaza Strip to be re-opened.
Karni is a key point of entry and exit for goods
The Israeli army has shut the Karni crossing on and off for much of this year, citing safety concerns.
Correspondents say the decision by Amir Peretz follows concerns that Israel's tight border security is causing humanitarian problems for Palestinians.
Palestinians import much of their food through Karni and use it to export goods, especially agricultural produce.
Mr Peretz took the decision overnight to re-open the crossing in both directions, Israel's Haaretz newspaper reported on its website.
"Our war is against terror, not against the residents of the Strip," Haaretz quoted him as saying during a meeting with Israeli army commanders.
The Israeli authorities have closed Karni for long periods this year, saying that Palestinian militants were planning to attack the site.
Last month, Palestinian security forces foiled an attempted bombing there and in February Israeli troops clashed with Palestinians whom they said were trying to plant an explosive device.
The Karni crossing was recently opened to allow goods from Israel into the Gaza Strip but remained closed in the other direction.
The UN says the frequent closures have resulted in widespread food shortages in Gaza, home to about 1.5 million Palestinians.
The Palestinian economy, currently in dire straits, loses at least $1.5m a day when Karni is closed to exports, according to the Palestinian Trade Centre (PalTrade).
Foreign aid has been frozen since the militant group Hamas - regarded as a terrorist movement by the US and EU - won elections in January.
Western donors want to pressure Hamas into renouncing violence and recognising Israel.
The EU, UN, Russia and the US have agreed to set up a "temporary international mechanism" to channel the money for an initial three-month period, bypassing the Hamas-led Palestinian Authority (PA).