Israeli soldiers fold the national flag at the former Gush Katif settlement on Sunday. (AFP)

Neve Dekalim (Gaza Strip), Sept. 11 (Reuters): Israel lowered its flag over the Gaza Strip today, clearing the way to complete a troop pullout and hand the territory to the Palestinians tomorrow after 38 years of occupation.

Their bases dismantled and the Jewish settlements they guarded in ruins, several thousand remaining soldiers began the final stages of a withdrawal that will leave the Palestinians with a volatile testing ground for statehood.

As the sun set, the Israeli army carried out a symbolic flag-lowering ceremony at Neve Dekalim, one of the 21 Gaza enclaves evacuated and demolished under Prime Minister Ariel Sharon’s plan to disengage from conflict with the Palestinians.

“Tomorrow, Monday September 12, 2005, the Israeli army’s 38-year presence in the Gaza Strip will come to an end,” Lieutenant-General Dan Halutz, the military’s chief of staff, said at the ceremony. “We are leaving with our heads high.”

Thousands of Palestinians waited to pour into Neve Dekalim.

“We are full of happiness and impatient to see the Israelis rolling out of our area for good. It will be our happiest day in decades,” said one of those in the crowd, Sami Abu-Akar, 35.

As the crowd pressed to enter the abandoned settlement, Israeli troops shot and wounded four of them, witnesses said.

The youths were shot near a fence where soldiers stood on guard as Major-General Dan Harel, chief of the army’s southern command, told the Neve Dekalim ceremony: “We are at the gate of peace, at the beginning of a hopeful new future with our neighbours.”

While welcoming the pullout, the Palestinian Authority fears Sharon is trading Gaza, home to 1.4 million Palestinians, for permanent hold on larger areas of the occupied West Bank where 245,000 Jewish settlers live isolated from 2.4 million Arabs.

Like most twists in the Israeli-Palestinian conflict, the impending pullout, hailed by the US as a chance to resume peacemaking, was marred by dispute and recriminations.

The last obstacle to the army’s exit was cleared when Israel’s cabinet decided not to level 19 settlement synagogues, unlike settlers’ homes demolished in last month’s evacuation, and leave their fate to the Palestinians.

The Palestinian Authority accused Israel of trying to saddle it with the blame internationally if Jewish houses of worship were defaced by Palestinian crowds targeting hated symbols of the occupation of the tiny coastal territory.