Israeli tanks and troops withdraw following deadliest military assault on Gaza Strip in years.
Israeli forces pulled out of the Hamas-run Gaza Strip on Monday after days of clashes that killed more than 110 Palestinians and dealt a major blow to nascent Middle East peace talks.
Residents in the north of the territory cautiously ventured out from their homes and picked through the rubble as Israeli tanks and ground troops withdrew following the deadliest Israeli military blitz on Gaza in years.
"The operation is winding down. Almost all our forces have already returned to Israel," a military spokesman told newswire AFP.
The bloody assault earned Israel international condemnation for excessive use of force and caused moderate Palestinian President Mahmud Abbas to cut contacts with the Jewish state shortly before US Secretary of State Condoleezza Rice arrives in the region aiming to push revived peace talks.
Since the dramatic escalation in violence last Wednesday, 116 Palestinians, including 22 children and dozens of militants, have been killed, according to Gaza Health Ministry statistics. More than 350 were wounded.
Two Israeli soldiers were also killed in the clashes and one Israeli civilian died in a rocket attack launched by Gaza militants.
Israel launched the operation on Saturday in a bid to stop near-daily rocket fire from Gaza, where the Islamist Hamas movement - which is sworn to Israel's destruction - seized power last June by routing pro-Abbas forces.
"The objective of the operation was to hit those who fire rockets toward civilian population centres in Israel," Deputy Prime Minister Haim Ramon told public radio.
Ramon expressed "regret" for the "death of innocent civilians" in Gaza, but put the blame on Hamas and other militant groups inside the impoverished, densely-packed territory who fire rockets and mortars into Israel.
Gaza militants fired two rockets as the troops retreated on Monday, with the projectiles falling in the coastal city of Ashkelon lightly wounding one woman, according to Israeli rescue services and police.
Hamas, which admitted to losing some three dozen fighters in the fighting, boasted that the Israeli withdrawal showed the army had failed.
"This retreat is an expression of the failure of the Israeli soldiers facing the fighters of the Ezzedine Al-Qassam Brigades," spokesman Sami Abu Zuhri told reporters, referring to the group's armed wing.
"This war that was declared by Israel will not achieve its goals," he said, adding that a victory march would be held later in the day in Gaza to celebrate Israel's "defeat".
The violence in and around Gaza sharply escalated early on Wednesday after an Israeli air raid killed five Hamas militants in the south of the impoverished and increasingly isolated territory.
Hamas retaliated by firing a barrage of rockets, one of which killed a civilian in southern Israel, the first such death since May 2007. Rocket attacks have killed 14 civilians inside Israel since the start of the second Palestinian uprising in September 2000.
The clashes reached a peak on Saturday, after Israel sent in a regiment of ground troops in an operation dubbed "Hot Winter" that killed 77 Palestinians in two days.
Amid the bloody assault, Abbas suspended peace negotiations and cut off all contacts with Israel.
The two sides revived peace talks to great fanfare at a conference in the US in late November, but have made almost no progress since then as a result of deep divisions over core issues of their decades-old conflict.
At least 317 people have been killed in Israeli-Paelstinian violence since then, most of them in Gaza, according to an AFP tally.
The aftermath of the violence will present a challenge for Rice, who is due to arrive on Tuesday in the region for talks with Israeli and Palestinian leaders in her latest bid to advance the halting peace talks.