As tens of thousands of Palestinians clambered back and forth between the Gaza strip and Egypt today, details emerged of the audacious operation that brought down a hated border wall and handed the Islamist group Hamas what might be its greatest propaganda coup.

Hamas, which took control of the coastal territory last June after a stand-off with Fatah, has denied that its men set off the explosions that brought down as much as two-thirds of the 12-km wall in the early hours.

But a Hamas border guard interviewed by The Times at the border admitted that the Islamist group was responsible and had been involved for months in slicing through the heavy metal wall using oxy-acetylene cutting torches.

That meant that when the explosive charges were set off in 17 different locations between midnight and 1am the 40ft wall came tumbling down, leaving it lying like a broken concertina down the middle of no-man's land as an estimated 350,000 Gazans flooded into Egypt.

The guard, Lieutenant Abu Usama of the Palestinian National Security, said of the cutting operation: "I've seen this happening over the last few months. It happened in the daytime but was covered up so that nobody would see."

Asked whether he had reported it to the government, he replied: "It was the government that was doing this. Who would I report it to?"

Abu Usama, who normally works from a small guard cabin in no-man's land, added: "Last night we were told to keep away from the wall. We were ordered to stay away because they were going to break the blockade."

As Gazans flooded into Egypt, the strip's Hamas prime minister, Ismail Haniya, called for an urgent meeting with his rivals in Fatah and with the Egyptian authorities to work a new border arrangement.

Mr Haniya called for the border crossing to be reopened "on the basis of national participation," meaning that Hamas would be prepared to cede some control to President Abbas and his Fatah-led government in the West Bank. "We don’t want to be the only ones in control of these matters," Mr Haniya said, speaking from his Gaza City office live on Hamas TV.

"Everything Haniya is saying is simply to exploit this situation to win political gains. ... It is a part of the problem, not the solution," said Ashraf Ajramim, a Cabinet minister in Mr Abbas's government. Israel refused to comment on the developments in Gaza.

The skill of the Hamas demolition operation was clear to see along the border, although The Times could not visit the entire length of the border. Where the charges had been laid, the wall was heavily damaged. Elsewhere it appeared to be clearly cut.

The destruction of the wall prompted hundreds of thousands to cross into Egypt – and Egyptian border guards did not try to stem the tide of humanity.

Instead Rafah became a huge Middle Eastern bazaar. Thousands of people were herding back cows, sheep and even camels from Egypt into the Gaza strip. Others brought back motorbikes while many women lugged back cans of olive oil and men could be seen weighed down with jerry-cans full of fuel.

Moneychangers flocked to the border, offering Egyptian pounds and American dollars for the Gazans' Israeli shekels. The shops soon began to run out, however, and those returning were complaining of sky-rocketing prices.

Instead, many people jumped into taxis - or even on the roofs of taxis - to take themselves to El Arish, 45km away, the nearest town with shops.

In no-man's land, along the stretch that the Israelis used to call Philadelphia Road before their disengagement in 2005, Hamas gunmen raced along in pick-up trucks flying the group's green flag. Egyptian riot police waited by the gates of the old border crossing, leaning with nonchalance against their riot shields.

Among those returning were Osama Hassan, 25, who went shopping with his 17-year-old fiancee Sarah for their wedding essentials. He bought a special mattress for his injured back; she brought kitchen supplies.

“I’m Fatah, but today, I wish I could see (Hamas prime minister Ismail) Haniya and kiss his forehead, because without the gunmen doing this, we would have been stuck in the Gaza Strip,” he said.

Egyptian shopkeepers swiftly raised prices of milk, taxi rides and cigarettes, but that did not deter the Gazans, for many of whom it was their first trip out of the territory.

Some staggered back into Gaza carrying televisions, and others sported brand-new mobile phones. In Gaza City, prices of cigarettes - which had skyrocketed during the total blockade of the past week - fell by 70 per cent in a few hours.

Rami al-Shawwa, a 23-year old falafel vendor, said he planned to head to Egypt in the afternoon, after his brothers returned from there. He was going to buy waterpipe tobacco and just “smell some new air”.

“We have been living in darkness for days, and closure before,” he said, adding that he is not concerned about getting stuck in Egypt. “For my 23 years in Gaza, a year in Egypt will make up for it.”