The handover of Jericho follows weeks of dispute over the removal of three army roadblocks ringing the town.
Israeli and Palestinian security commanders were wrapping up a joint tour of Jericho on Wednesday, the final step in handing over the quiet West Bank town to Palestinian security control.
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The handover follows weeks of dispute over the removal of three army roadblocks ringing the town.
In a compromise, Israeli troops were taking down one barrier on Wednesday and leaving two in place for another month.
Jericho is the first of five towns to be handed to the Palestinians in coming weeks, in line with agreements reached at a Mideast summit last month.