When Israeli troops lifted their two-day siege of the neighborhood called Brazil on Friday morning, everything was in the wrong place.

Multi-story buildings were gone, bulldozed to dust and chunks of concrete. New passages had been created by tanks that crashed through back yards. Some residents of the neighborhood were nowhere to be found.

A visitor from another part of this sprawling camp, which is home to nearly 100,000 Palestinians, pointed to a pile of rubble and asked: "Where is the family that lived over there? My sister lived in that house."

Four days after the Israeli military began the sweep called Operation Rainbow, troops and armor pulled back from Brazil and parts of the nearby Tel Sultan neighborhood. Senior Israeli military officials said, however, that the forces had been repositioned and were not being withdrawn.

"The operation is continuing as usual until we reach all the targets we've set for ourselves," the commander in charge of Gaza, Brig. Gen. Shmuel Zakai, said at a briefing in Tel Aviv.

At least 40 Palestinians have been killed in fighting during the operation, which officials said is aimed at rounding up Palestinian guerrillas and destroying tunnels used to smuggle weapons and other goods under the nearby Egyptian border. Initial reports indicated that one tunnel had been found, said an Israeli army spokesman, Capt. Jacob Dallal. Hundreds of people have been questioned, he said, and a few dozen are still in custody.

In Tel Sultan, which was sealed off early Tuesday at the start of Operation Rainbow, residents reported that although restrictions on their movement had been eased, Israeli tanks still ringed the neighborhood.

With the siege lifted, residents of Brazil and Tel Sultan were able to move in and out, and humanitarian aid workers brought in essential goods that some said were in desperate short supply. U.N. trucks delivered about 10,000 gallons of water to Tel Sultan, and people were able to buy food.

Zakai and army spokesmen said Palestinian officials had exaggerated the degree of hardship in the affected neighborhoods to increase international pressure on Israel to withdraw from the area. They said residents had regular access to food, water and medical care and had received 70 ambulances and more than 40 truckloads of food, water, medical supplies, mattresses and blankets.

"There is no humanitarian crisis in Rafah," Zakai said.

But the deputy director of the U.N. Relief and Works Agency here, Christer Nordahl, said the destruction of property would be more difficult to overcome. "I'm very worried about what's going to happen in the coming days," Nordahl said. "It falls on our watch to try and find new shelter for these people."

In an effort to cut off smuggling through the tunnels, Israeli military bulldozers have destroyed more than 1,200 houses in the Rafah camp in the past 31/2 years, according to the U.N. relief agency. In the past week, 40 buildings have been destroyed, according to U.N. officials, and dozens have been damaged. As a result, the officials estimated, 450 people were added to the nearly 11,000 already made homeless by the bulldozers.

The U.N. agency has opened two school buildings to house the refugees, and the Islamic Resistance Movement, known as Hamas, and other Palestinian groups are distributing food and financial aid.

On Friday morning, many buildings in Brazil looked like wrecked dollhouses. Walls were sheared away, revealing rooms where neat doilies still lay on tables and china in cabinets.

Residents were piling donkey carts with washing machines, mattresses and television sets to be moved to safety. Others picked through the rubble to find lost items. A man walked down a sandy street balancing a pile of frying pans.

"This is the third time my house has been demolished," Faiza Malahi, 37, said as she stacked mattresses on a cart. "I'm packing my furniture, but I don't know where I'm going to put it next."

Somewhere in the rubble of his home, said Ihab Mansour, was 1,500 Jordanian dinars he had intended to use to pay the bride price for his fiancee. At nightfall, Mansour, 23, was still guarding the area from digging children, trying to figure out a way to salvage his planned marriage.

Salman Qishta, 90, was in bed just past midnight Thursday when, according to relatives, Israeli forces knocked down an adjacent building. Collapsing walls crashed down on Qishta's home, partially pinning him under a pile of bricks and a water tank.

Qishta escaped with mild shock and head injuries, his relatives said, but his bedroom was destroyed, so on Friday he slept in a makeshift bed in his garden.

Israeli officials said only seven houses were demolished this week but conceded that many more had been extensively damaged in fighting. Armored bulldozers tore up the pavement of virtually every street in a search for mines and other explosives planted by militants, they said.

During the siege, Ashraf Alkhapeed, 26, an emergency medical technician for the Palestinian Red Crescent, shuttled between treating the injured near Tel Sultan and trying to reach his own family, besieged in Brazil.

Once his wife phoned while he was giving oxygen to a wounded 13-year-old. "There are Israeli tanks right outside the door," she said. "Please come and get the baby out."

Alkhapeed borrowed an ambulance and tried to enter Brazil four times, but the vehicle was shot at by tanks posted at the entrance to the neighborhood.

He said he told his wife over the phone: "Don't be afraid. I'm going to come to help you. Don't anybody go to the window or the door. Don't make noise."

But the baby wouldn't stop crying.

When the Brazil area opened Friday morning, Alkhapeed had to work for several hours before he could break away and look for his family. When he could, he rushed home to find everyone fine but his house riddled with bullet holes. So he arranged to send the family out of town, and he went back to work.

Correspondent Glenn Frankel in Jerusalem contributed to this report.

Police at the Kisufim crossing between Israel and the Gaza Strip scuffle with an Israeli peace activist protesting the army's operation in Rafah.A Palestinian woman sits in the rubble of her house in the Brazil section of the Rafah refugee camp. About 40 buildings were destroyed this week.