"IDF forces (Israeli Defence Forces) have currently completed their activities in the area," the Israeli army said in a statement.
The ground forces had been positioned on a road running from north to south near the Deir al-Balah refugee camp and the town of Khan Yunis.
The army says the only place ground forces remain, in the territory, is in Dahaniya, in the south, near Gaza's former international airport.
Strikes continue
But, Palestinian security sources say Israeli air strikes continue, with a house of a Hamas MP hit in Beit Lahiya in the northern Gaza Strip and a bridge struck in the central party of the territory.
The Israeli army confirmed the attack on the bridge, and one on a Hamas office in Gaza City. It’s spokesman also says artillery from ground and naval gunboats had bombarded the northern and southern parts of the territory.
Four rockets fired, by militants, from Gaza exploded in the southern Israeli town of Sderot on Friday but caused no damage or any casualties, the military said.
One Palestinian was killed late Thursday when an Israeli tank fired a shell at the vehicle moving in the direction of Israeli forces stationed in the Qarara in the southern Gaza Strip.
At least 76 Palestinians and one Israeli soldier have now been killed since Israel stepped up its incursion into Gaza in a bid to retrieve Corporal Gilad Shalit, kidnapped by Palestinian militants on a raid last month.
US veto
The Israeli offensive continued as the United States used its veto rights against a United Nations resolution calling on Israel to halt its military operations in Gaza, condemning the assault and calling for the immediate withdrawal of troops.
The US Ambassador to the UN John Bolton said the veto was because of the "unbalanced" nature of the draft text which, he said, laid a disproportionate amount of blame on Israel.
The vetoed text had also condemned the firing of rockets from Gaza into Israel and Corporal Shalit's abduction. His captors have demanded the release of prisoners in exchange for the 19 year old.
But Israel has refused any to deal with the militants, vowing the assault will continue "in places, in time, in measures" at its convenience.