Israeli troops withdrew from the West Bank town of Tulkarem late on Saturday, the army said ahead of talks with visiting EU representatives.
Israeli troops entered six West Bank towns in October, in response to the assassination of an Israeli Cabinet minister by Palestinian militants.
The United States has repeatedly demanded that Israel immediately withdraw from Palestinian territory and not return.
Israel has said its military strikes, including incursions into Palestinian territory, are aimed at preventing attacks by Palestinian militants.
The Israeli military said troops completed their withdrawal from Tulkarem late Saturday.
On Sunday Palestinian workers immediately began repairing the damage caused by Israeli tanks to the streets and buildings of the town.
The Israeli army said, however, that a closure of the town will remain in effect, meaning residents are barred from leaving and entering.
The army says it withdrew to positions on the outskirts of the town outside the borders of the Palestinian-controlled area, and that the withdrawal was complete.
The Israelis now only remain in the town of Jenin.