RAMALLAH, West Bank ? Israel bowed to U.N. demands and U.S. pressure Sunday, pulling troops and tanks out through the barbed wire that encircles Yasser Arafat’s headquarters. The Palestinian leader said the move was only “cosmetic.”

As troops removed sandbags, generators and debris from around the Ramallah compound to end the 10-day standoff, Israel said it still planned to arrest alleged terrorists it says are holed up with Arafat. Nevertheless, both sides offered conciliatory gestures.

Briefly emerging from his building one of the last still standing in the Palestinian government complex Arafat flashed a V-for-victory sign to a crowd of several hundred supporters. He renewed his promise to order a cease-fire if Israel were to take troops and soldiers out of all Palestinian territory.

Israel demanded a Palestinian crackdown on terror but eased restrictions on Palestinians trying to enter Israel from the West Bank and Gaza Strip. Jobs in Israel are crucial to many Palestinian families.

Under the new rules, 25,000 Palestinian workers will be allowed to enter Israel daily instead of the current 15,000. The quota of Palestinian businessmen was raised to 8,000 from 5,000.

Nevertheless, Arafat accused Israel of continuing to violate Tuesday’s U.N. Security Council resolution demanding an end to the siege as well as to Israel’s months-long occupation of Palestinian cities and to terrorism and other violence from both sides.

“They are trying to deceive the Security Council,” a stern and seemingly weary Arafat told reporters in his office, minutes after Israeli troops had moved away. He called the pullback a “cosmetic movement.”

Some Israeli troops remained within a few hundred yards of the compound and Israeli officials said they still planned to arrest wanted men who were among the 200 people holed up with Arafat since the siege started on Sept. 19.

“We are talking about approximately 18 people who are in the compound who have direct involvement in organizing and conducting terror activities…. Some of them have blood on their hands,” Israeli Foreign Ministry spokesman Jonathan Peled told the Associated Press.

Hesaid some others inside “may be wanted for interrogation,” but Israel did not know the identities of all in the compound.

Asked if Israel would try to arrest the 18 if they leave, he replied: “That is our intention.”

Palestinian leader Yasser Arafat flashes the victory sign to supporters outside his office in the West Bank town of Ramallah. Responding to U.S. pressure, Israel withdrew its forces Sunday from Arafat's compound.

He indicated that Israel was not ready for an unconditional pullback from Palestinian cities, but would move “once we see a serious commitment from the other side in taking over those territories and showing us a halt to violence and terror.”

Arafat issued a proclamation repeating “full commitment with all cease-fire decisions,” though his aides have often said that his ability to control militant Palestinian factions is limited. Israeli officials have accused Arafat of doing little to try.

Also on Sunday, the militant Palestinian group Hamas marked the second anniversary of the Palestinian uprising with a pledge to continue its suicide attacks against Israel.

A suicide attack claimed by the Hamas militant group killed six Israelis on a Tel Aviv bus on Sept. 19, triggering Israel’s attack on Arafat’s compound.

The U.S. administration, trying to rally support for an action against Iraq, soon put heavy pressure on Israel to halt the siege.

In a statement announcing its decision to end the siege, the Israeli Cabinet of Prime Minister Ariel Sharon noted “the deep friendship between Israel and the United States” and promised “to do everything … to enhance the strategic cooperation and relations.”

U.N. envoy Terje Roed-Larsen entered the building immediately after Israeli troops left. “This is not the end of the crisis but a springboard to put us back on to political process” toward a peace agreement, said Mark Dennis, a spokesman for Larsen.

In Texas, where President Bush was vacationing, the White House praised the withdrawal but said not only Israel but the Palestinians should act to bring peace.

“The president is pleased with this development,” White House spokesman Gordon Johndroe said Sunday. “Both parties need to live up to the requirements for peace, stability, as well as reform in the Palestinian Authority.”

But Israeli politicians from both the left and the right called the decision a surrender. Many have argued the operation strengthened Arafat at a time when he had been facing growing pressure to reform his government and cede some powers.

Yossi Sarid, Israel’s dovish opposition leader, welcomed Sunday’s decision but added that it amounted to a capitulation by “a foolish government that can’t see two steps ahead.”

Hawkish legislator Avigdor Lieberman said the protracted siege was a mistake and interfered with the U.S. efforts on Iraq.

A poll released Sunday by the Palestinian-run Jerusalem Media and Communication Center found that Palestinian support for Arafat’s re-election during January elections has risen to 60 percent from 48 percent during the last survey in June. The poll had a 3 percentage point margin of error.

The survey of 1,199 Palestinians also found that support for suicide bombings against Israeli civilians dropped slightly to 64.3 percent from 68.1 percent in June.

Reflecting questions about the wisdom of terror attacks, the speaker of the Palestinian parliament, Ahmed Qureia, issued a statement published Sunday that urged “a serious, comprehensive and responsible reassessment” of the current Palestinian uprising.