Israel completed a handover of the West Bank town of Bethlehem to Palestinian police today under a security pact supporting a new US-backed peace plan, Israeli security sources said.
Church bells rang in Manger Square of the town revered by Christians worldwide as the birthplace of Jesus.
Armed Palestinian police fanned out from the central police station, their patrol car sirens blaring and took up positions in Bethlehem, which is situated just south of Jerusalem.
Bethlehem saw fierce fighting and full Israeli occupation last year at the peak of a Palestinian uprising.
More recently, soldiers had patrolled in the town only infrequently. After the handover, Israeli troops continued to surround and restrict movement in and out of the town, so the military disengagement was largely symbolic.
The accord requires Palestinian police to crack down if needed on militants seeking to attack Israelis. Israel said if they did not do so, it would be free to re-enter the town.
On Sunday and Monday the Israeli military withdrew from the northern Gaza Strip and reopened its north-south highway to Palestinian traffic for the first time since a Palestinian uprising erupted in 2000.