Palestinians celebrated a step toward independence from Israel on Friday with a jubilant ceremony opening the Rafah border crossing between the Gaza Strip and Egypt, their first self-governed passage to the outside world.

The event marked a milestone in the long Palestinian-Israeli conflict by giving a Palestinian government control over an international border crossing for the first time. The opening is the most tangible benefit the Palestinian Authority has gained since Israel's withdrawal from Gaza a little over two months ago, an evacuation that ended a 38-year Israeli presence in the strip but left its borders under Israel's control.

Palestinian leader Mahmoud Abbas, who stands to benefit politically from Rafah's opening, told roughly 1,200 Palestinians, European diplomats and Egyptian officials who will help monitor the border that the measure of autonomy was "a dream that has come true for us." But he said the opening was a modest step and pledged further progress toward the creation of a Palestinian state alongside Israel that would include the more populous West Bank.

"Our sovereignty is not yet complete," Abbas said during his speech inside a tent on a day of brilliant blue skies and a light breeze. "Sovereignty cannot be divided. It has to include both parts of the homeland and make them one territory."

The Rafah crossing has tremendous social importance for the 1.3 million Palestinians in Gaza, many of whom have family on the far side of the heavily fortified frontier that Israel had patrolled since occupying the strip in the 1967 Middle East war.

Before its evacuation of 8,500 Jewish settlers and the soldiers who protected them, Israel regulated traffic through Rafah. But the crossing was frequently closed for long periods, disrupting people's lives and sometimes leaving Palestinians on the wrong side of the border for weeks at a time.

In the days following Israel's departure, thousands of Palestinians stormed through the barrier in a chaotic demonstration of newfound freedom. But several days of unchecked crossings, marked by family reunions, smuggling and afternoons at the beach along the Sinai coast, ended when embarrassed Egyptian and Palestinian security forces restored the barrier.

The display of exuberance infuriated Israeli officials, who had withdrawn from the frontier after Egyptian and Palestinian security forces pledged to maintain the closure until a new crossing could be established in six months.

Since then, the crossing has remained sealed while Israeli and Palestinian delegations negotiated an agreement to open Rafah and the cargo terminal at Karni between Gaza and Israel, a passage of far greater economic importance to Palestinian farmers and factory owners who sell most of their goods outside of the impoverished strip. Under pressure from special Middle East envoy James D. Wolfensohn and Secretary of State Condoleezza Rice, Israel agreed on Nov. 15 to open Rafah and increase cargo traffic at Karni in time for the winter harvest.

Under the Rafah agreement, a team from the European Union will monitor people using the crossing from a control room at the site. Israeli officials, meanwhile, will be allowed to watch people crossing on a live video feed at a terminal several miles away. But for the first time Israeli officials will not be allowed a veto over who is allowed in or out of the strip, a right they sought during weeks of talks. Egyptian officials will control passage on the other side.

"Hopefully, this is the beginning of creating a situation in which there will be a constant flow of goods and people in and out of Gaza," said Mark Regev, a spokesman for the Israeli Foreign Ministry. "Israel understands that such a flow of goods and people is an integral aspect of making Palestinian-controlled Gaza a success. The fundamental truth is that a successful Gaza is key to moving forward on the peace process."

But Regev warned that Palestinian extremist groups might attempt to use the Rafah crossing as a smuggling route for explosives, weapons and cash to fund suicide bombing missions. He said, however, that he was "cautiously optimistic" any such efforts would be detected.

"Everyone is very cognizant of the threat," Regev said. "The reason that this can work is that these groups are enemies to all of the parties, not just to Israel but also the Palestinian Authority as it seeks to govern Gaza."

The ceremony Friday was a symbolic opening. Abbas, who said that "the magic key that can give us everything is security," became the first Palestinian to have his passport symbolically stamped after touring the once-shabby Rafah terminal, which had been painted for the event. The crossing, draped Friday with a banner declaring "Crossing to Freedom," opens Saturday to general Palestinian traffic.

The crossing will be open four hours a day until the full complement of roughly 70 European monitors are in place. Diplomats say they hope this will happen within a month to handle travelers heading to Mecca on the annual Muslim pilgrimage known as the hajj. It will then operate around the clock.

Only foot traffic will be allowed through Rafah until new vehicle scanners are installed. Gaza exports will be allowed out through Rafah, but incoming cargo will pass through the Kerem Shalom terminal a few miles to the southeast where the Israeli, Gaza and Egyptian borders converge. It will remain subject to Israeli-Palestinian customs protocols.

Marc Otte, the European Union's Middle East envoy, said the day was one of "happiness." In a brief speech, Otte told the Palestinians that Rafah's opening was a step toward "transforming your borders into bridges with your neighbors and with Israel."

The opening could improve Abbas's standing with the Palestinian public, which is now preparing for Jan. 25 parliamentary elections. Those will be the first national elections in which the Islamic Resistance Movement, or Hamas, plans to compete against the secular Fatah movement, which Abbas heads.

The radical Palestinian group has claimed credit for Israel's unilateral withdrawal from the Gaza Strip, saying its attacks on Israeli soldiers and civilians by suicide bombers forced the evacuation. Hamas -- whose leader in Gaza, Mahmoud Zahar, attended Friday's ceremony -- has yet to recognize Israel's right to exist.

"Two moments in my life have been full of joy," Zahar said. "The first was when I entered the evacuated settlements in Gaza, and the second was when I came here today to see the crossing empty of Israelis. They were here, and now we are here. Tomorrow we're going to be in the West Bank and the next day in Jerusalem."

As head of Fatah -- which supports a peace process with Israel -- Abbas has had difficulty in recent months explaining to potential Palestinian voters why a negotiated settlement of the conflict is a favorable alternative to Hamas's brand of armed resistance. Palestinian officials have complained that Israel's apparent reluctance to ease passage at Gaza's border crossings and continuing occupation of the West Bank have weakened moderate Palestinians such as Abbas, who has long asserted that the armed uprising undermined Palestinian interests.

Standing at Rafah, Abbas said, "The achievement we're celebrating today belongs first and foremost to the martyrs, wounded, prisoners and all Palestinians who have sacrificed in this struggle.

"I think every Palestinian now has his passport ready in his pocket," Abbas said. "Let them come to cross at this terminal whenever they want."

Special correspondent Islam Abdel Kareem in Rafah contributed to this report.

Palestinian women wait to cross into Egypt after the opening of the Rafah terminal gave their government control of an international border for the first time.Hamas leader Mahmoud Zahar arrives at the opening ceremony.