At the same time, he called on Palestinians to halt attacks inside Israel.
Israel reduced the number to a few thousand as part of an effort to halt Palestinian attacks.
For its part, Israel has said it will show restraint if the new Palestinian leadership makes a major effort to halt attacks.
But the army has not been able to halt attacks, prompting some calls for a greater emphasis on diplomacy.
"The closure is intended to allow the Palestinian police to organize themselves to halt further attacks."
The agreement, which lets militants remain in the area as long as they promised to halt attacks, immediately set off concern among American analysts.
The attack came a week after the rebels called for peace talks and promised to halt attacks on targets that involved civilians.
Israeli security officials had suggested that they would stop singling out Hamas leaders, because the group appeared to have halted attacks inside Israel.
The United States warned Moscow to halt attacks on civilians.
The groups indicated a willingness to halt suicide bombings and other attacks inside Israel's 1967 borders.