Israeli troops Sunday pulled out of Jenin in the West Bank, one day after completing an operation in which a senior member of the Islamic Jihad was killed.
Israeli troops pulled back to the outskirts of Jenin, but are maintaining a military blockade around the West Bank town.
The withdrawal came two weeks after Israeli soldiers, backed by heavy armor, poured into Jenin in search of Palestinian militants they said were behind suicide bombing attacks.
The army left the city center one day after soldiers killed Iyad Sawalhe, a member of the Islamic Jihad, who topped Israel's most wanted list of Palestinian fugitives. Israel held him responsible for the killing of at least 31 Israelis in two separate bombings.
He was killed during a fierce gun-battle on Saturday, after refusing to give up himself up at his hideout.
An Israeli army spokesman said, with the Sawalhe death, many of the army's goals had been achieved. Some 200 suspected Palestinian militants were also arrested during the operation.
The spokesman said that the army delivered a severe blow to what he called the terrorist infrastructure of Jenin, which Israel describes as the center of the suicide bombers.
The Islamic Jihad, however, vowed that its operations would not be set back by the army's operations. A spokesman for the militant Palestinian group said that the killing of one of their top activists had only increased the organization's determination to press on with what he called jihad, or holy war, against Israel.
Late on Saturday, one Israeli soldier was killed and another wounded in a bomb attack near a Jewish settlement in the Gaza Strip. Islamic Jihad claimed responsibility, describing the bombing as the first in a series of attacks to avenge the death of Mr. Sawalhe.