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Most Israeli forces were withdrawn early on Monday
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Israeli Prime Minister Ehud Olmert has warned that the withdrawal of troops from Gaza does not mean Israel's military operation there is over.
Israeli forces pulled out overnight, several days after entering Gaza to try to suppress rocket fire. The operation ended with more than 100 people dead.
The Palestinian militant group Hamas claimed victory over Israeli forces and held a rally in Gaza City.
But Mr Olmert warned: "What happened in recent days was not a one-off event."
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We're encouraging Israel to exercise caution to avoid the loss of innocent life
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The prime minister told the parliamentary foreign affairs and defence committee: "We are in the midst of a combat action.
"The objective is reducing the rocket fire and weakening Hamas. Everything is possible... air strikes, ground strikes and special operations are all being discussed," he said.
'Interval'
A senior government official quoted by Reuters said Israel had called a "two-day interval" while US Secretary of State Condoleezza Rice visits Jerusalem and Ramallah in the West Bank on Tuesday and Wednesday.
Ms Rice will meet Mr Olmert and Palestinian Authority President Mahmoud Abbas.
Parts of Jabaliya, Gaza, have been destroyed by the operation
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Her visit was meant to move Israeli-Palestinian peace negotiations forward, following a commitment by both sides at a conference in November in the US.
However, Mr Abbas has formally suspended contacts with Israel in protest at its operation in Gaza.
Medical sources say at least 112 Palestinians have been killed since Wednesday, when Israel intensified its campaign in response to the firing of rockets from Gaza.
Three Israelis have died in the same period - a civilian killed by a rocket on Wednesday, and two soldiers since.
Steeled for more
Funerals were held on Monday for some of the Palestinians killed in the fighting, while Hamas called a rally in Gaza City.
Thousands of supporters turned out and posed for photos with Hamas gunmen.
"The invaders fled and the army of Jews was defeated," said a chant broadcast through loudspeakers.
But despite the defiance, Palestinians do not believe this is the last of the violence and are steeling themselves for more bloodshed, says the BBC's Aleem Maqbool in Gaza.
There were anti-Israeli demonstrations across the West Bank.
Rockets have continued to hit the Israeli city of Ashkelon
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A number of protesters were reported to have been injured in clashes in Hebron, and a teenager was shot dead near Birzeit university in Ramallah, reportedly by a Jewish settler.
There was widespread international alarm at the scale of the Israeli operation.
A US state department official said: "We're encouraging Israel to exercise caution to avoid the loss of innocent life."
The European Union criticised what it called Israel's ''disproportionate use of force'' and also demanded an immediate end to Palestinian militant rocket attacks on Israel.
Israeli human rights group B'Tselem expressed grave concern at what it called the large number of children and other uninvolved civilians among those killed and wounded in the Gaza Strip.
It said of the 106 Palestinians it recorded as dying violently between Wednesday and Monday, at least 54 were not involved in hostilities and 25 of them were minors.
Meanwhile, more than 25 rockets were launched on Sunday, and at least two more reached the city of Ashkelon on Monday after the Israeli withdrawal.
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