The opening of the crossing came on the heels of Palestinian protests in Gaza against the Israeli blockade.
Egypt on Thursday partially re-opened the Rafah crossing with the Israeli-occupied Gaza Strip, allowing one-way traffic into the Palestinian enclave, as Israel eased import restrictions for the territory it has blockaded since 2007.
In a statement, the Israeli army said the easing of restrictions is conditional on security and stability.
Rafah, Gaza's only gateway to the outside world not controlled by Israel, was shuttered on Monday by Egypt, which gave no reason for the move.
But it came after Gazans on Saturday staged protests along the border with Israel, demanding that Israel lift its crushing blockade. Israeli gunshots killed one Palestinian and left twenty others wounded. An Israeli soldier is in critical condition from a gunshot wound, too.
Late Wednesday, Hamas, which rules Gaza since 2007, announced that Rafah would open to incoming traffic on Thursday and to two-way traffic on Sunday.
People had begun to cross after midday, an AFP journalist said.
Hamas police made efforts to contain Wednesday's unrest by preventing people from approaching the border fence.
A branch of Israel's Defence Ministry, COGAT, said more goods would be allowed to enter Gaza from Thursday.
They would include "equipment for international civilian projects" and new vehicles, among other measures, it said in a statement.
Israel also agreed to boost by 1,000 the number of merchants allowed through its Erez crossing to Gaza.
"The civilian measures approved by the political echelon are conditional upon the continued preservation of the region's security stability, while further expansion of these measures will be examined in accordance with a situational security assessment," COGAT said.
Israel has hit Hamas targets in Gaza with airstrikes twice in the last week, with no casualties reported.
Thursday marks three months since an Egypt-brokered ceasefire ended Israel's 11-day assault on Gaza which killed 260 Palestinians, according to Hamas authorities. The rockets launched by Palestinian groups into Israel killed 13 people, according to Israel.
During the Israeli offensive on Gaza in May, Israel imposed severe restrictions on importing goods to Gaza, especially the construction materials, causing an additional economic crisis in the blockaded Gaza.
While Israel insists on the release of its missing soldiers in return for the reconstruction of Gaza, the Hamas group, says the issue of the soldiers is linked to a prisoners' swap.