They came and went in lorries and gas tankers, in flatbed trucks loaded with cattle and sheep, in coaches and mini-buses, loaded by the dozen in the backs of trucks, all shuttling across Gaza's southern border. Four days ago they went on foot like refugees, but yesterday for the first time the trucks drove through and it felt like an unstoppable momentum had been reached.

They carried generators and goats, diesel and huge piles of carrots and cabbages. But most of all they carried the message that Israel's long blockade of Gaza is over. 'I want to get some cheese,' says Ameera Ahmad, after crossing the border from Gaza into Egypt yesterday. 'And honey. Look, crisps! I haven't seen a bag of crisps for months.'

The teenager in the car's front sticks his head out of the window into the crush of vehicles and people. 'Jibna!' he shouts, meaning cheese. It is not a request, although there are people selling it nearby. It is an affirmation of the possibilities outside Gaza.

Ameera, 24, texts her husband to ask if there is anything he wants brought back from Egypt. 'Oh!', she says suddenly in a quiet, happy voice, surveying a pretty vista of open fields, without walls or boundaries that cannot be crossed without risk. 'This is my first time out of Gaza.'

So walls fall down. Not only physically, blasted down on Gaza's border with Egypt last week with dynamite and cutting torches, but in the mind as well.

On the fourth day of Gaza's explosive relief from seven months of tight economic blockade by Israel, and seven longer years of economic isolation since the beginning of the second intifada, it was not only people who were crossing yesterday.

After bulldozers of the militant group Hamas, which controls Gaza since seizing power last June, opened new routes through the border area on the Philadelphia Road on Friday night a new kind of traffic was streaming over.

By mid-afternoon, as the news had spread through Gaza that Egypt was accessible by car, and not just by foot, the cars, buses and lorries snaked from the border, through Rafah and Khan Younis and up to Gaza City in a column in perpetual motion. The men of Hamas's Executive Force stood with their weapons by the road and watched the passing traffic.

Beyond the border, out of the clogging traffic jams, the vehicles fanned out, little convoys of Palestinian cars setting off along the sandy roads to avoid Egypt's police on the main highway, traversing fields of flowering trees and tiny farms, all heading for the city of Al-Arish, 60 kilometres distant.

What seemed on Wednesday to be a huge, but perhaps brief, phenomenon dampened by the attempt by Egyptian riot police who moved later in the week to try to reseal the border, by this weekend was taking on the impression of a seismic and unstoppable reordering of the facts of the Middle East.

The four short days since Hamas blew down the six-metre metal border wall built by Israeli soldiers before the withdrawal of Israeli settlers and troops has forged a confusing new reality on the ground. What first was being treated as a holiday from the oppressive conditions of Gaza under Israeli siege, by yesterday was taking on the attributes of an entitlement - one for long refused.

But its uncertainties - in particular what it means in the long run for Gaza - do not change a simple fundamental fact. For the first time in years Gazans feel free. And when Gazans remember the last week it will be in two halves.

What will separate it in people's memories will be the cold and overwhelming notion of Israel's blockade that is lifted - at least for now. What they will remember will not simply be the condition of unemployment and deprivation that have gathered pace but the slow, corrosive degradation of a society that has accelerated since the beginning of the second intifada in September 2000, with the closing of Israel's labour markets to Palestinian workers.

It is something that a few brief days of 'festival' - as many Gazans described the extraordinary scenes last week as they poured into Egypt to shop and visit relatives - cannot solve overnight. And which they cannot fix alone.

It is exam day at al-Azhar University. In the women's campus, a hundred or so girls sit in the chill winter morning, some still cramming from notebooks for exams that mean little in a place where a degree does not mean a future. In his office, Mkhaimar Abu Sada, a political scientist, talks about the years of the blockade. He believes Gaza's problems cannot simply be traced to the recent tightening of the closure on Gaza by Israel two weeks ago to complete closure - ostensibly in response to an increase of attacks from home-made Qassam missiles - aimed at the nearby Israeli town of Sderot.

He believes Gaza's problems are the consequence of a longer-lasting pattern of behaviour whose wounds and deformities are beyond transformation overnight. 'Since September 2000 and the beginning of the second intifada the Israelis stopped using Palestinian labour. Those going to the "other side" could earn between three and five times as much as labourers in Gaza. It was hugely important to Gaza.

'It had a huge economic impact. The figures now show that we now have unemployment running at in excess of 55 per cent, and 80 per cent of the population lives below the World Bank's poverty level.'

But it is only part of a history of Gaza's decline. In truth that began with the al-Nakba - 'the Catastrophe' - as Palestinians call the Arab-Jewish war of 1948 that saw the establishment of the state of Israel. Then, Gaza's population of 80,000 was swollen by the influx of 200,000 refugees, whose descendants occupy Gaza's UN-run string of camps.

Occupied by Israel during the Six Day War in 1967, which seized it from Egyptian rule, the long years of direct Israeli rule ended with the Oslo peace accords that failed to see the end of Israeli settlement within the Gaza Strip. That only ended with Israeli's unilateral 'withdrawal' in September 2005 that left Israel still largely in charge of access to Gaza, its airspace and access to the sea. Israel provided two-thirds of Gaza's electricity, policed the land routes into which fuel, medicines and raw materials must pass, and controlled access of Palestinians to labour markets - Gaza's population was in effect imprisoned.

Never wealthy, Gaza's economic collapse was rapidly accelerated following the election in 2006 of the militant Hamas in the Palestinian elections in Gaza and the West Bank. Amid factional fighting between Hamas and the previously dominant Fatah, and a widespread breakdown in law and order, Hamas finally assumed power from Fatah in a few days of violence seven months ago. Israel's response was to declare a Hamas-led Gaza a 'hostile entity', further strangling a sealed off Gaza Strip and leading to severe shortages of cement, cigarettes and other basic goods, in a move that further deepened poverty.

That noose was tightened even harder this month after a rise in rocket attacks led Israel to impose a complete closure on the Gaza Strip - relenting later to allow in some fuel and humanitarian supplies amid international horror at what was being done to Gaza as a whole. But deep and lasting damage had been inflicted, long before the events of the last week.

For the consequence of the longer-term blockade of the Gaza Strip - measuring just 40 kilometres by 10 - has been a far-reaching social fragmentation going deeper even than the political and clan violence that plagued Gaza before Hamas took power. For as the economic screw has been turned by Israel on Gaza, domestic violence, divorce and child abuse have increased to levels previously unheard of in a society where the family is a basic building block.

'One of the main problems,' says Sumya Habeeb, who works in marriage counselling in Gaza, 'is that wives do not understand why their husbands are sitting around not earning any money. It is one of the major causes we are seeing both of domestic violence and wives returning to their parents. There is tremendous stress in marriages, not least for those men who worked in the Palestinian security forces before the Hamas takeover and who lost their jobs.'

Gaza's great migration shows no signs of solving its longer-term problems. Instead, in the short term it may exacerbate its already deep economic woes if a more equitable solution to the Gaza question is not worked out.

For even as tens of thousands headed south, other merchants, already on the edge of ruin, were left watching money that would, in normal circumstances, be spent inside Gaza pouring out into Egypt.

Among them, in the Saha market in Gaza City, was Jaweed Ashour, the 42-year-old owner of Ashour Watches, who gloomily surveyed the sudden influx of both Gazan and Egyptian street sellers into the market-place outside his shop hawking cheap clothes and cigarettes brought from across the border.

'I have seen no one come in today,' he says standing in his small shop. 'This month I haven't sold a single watch. This is the hardest time I have ever known. There is no money. I no longer buy what we used to eat. I used to buy my son new clothes at every Eid. Now I can't. If I buy a bag of sugar it is only a kilo bag.'

If many businesses faced being damaged, others will be saved by the opening of the Egyptian border after the months of hardship. Among them is the Lotus Flower hairdressing salon of Fatin Kehail. 'Before the tightening of the blockade, after the Hamas takeover, women still used to go to restaurants and hotels a lot,' she explained. 'Now the only customers I tend to see are brides preparing for their weddings. Even then people will say: "Three hundred shekels? That is too much now." I understand and do my best when I can.

'There are less weddings that I hear of, too. People have been putting it off. And because of the blockade I am running out of the stuff I need for work, like hairsprays and shampoos. I'm down to my last gallon of shampoo. I hope to go to Egypt to replace it.'

They are contradictions that are reflected in the wider questions posed for the future of Gaza. For while the propaganda coup by Hamas, under intense Israeli pressure, of bringing down the wall may well have temporarily humiliated and wrong-footed Israel, the issue of where in fact Gaza's future lies may have been made more complicated still.

There is little likelihood that Egypt can replace the valuable jobs lost in Israel for Gazan workers, even if President Hosni Mubarak has the will to do so, in a country where day rates for labouring are tiny in comparison.

While Mubarak may have acquiesced - under pressure from an outraged Arab street - into allowing the Palestinians of Gaza to cross the breached border en masse, a President who routinely locks up members of the Muslim Brotherhood is unlikely to view dealings with its off-shoot, Hamas, with very much enthusiasm.

Israel also finds itself in a similar bind. While some politicians suggested last week that the fall of the Rafah wall was an opportunity to hand responsibility for Gaza to Egypt, that, too, shows signs of a deep naivety.

Although there are those in Israel who might wish that Gaza looked to Egypt, Hamas - Gaza's key player - is unlikely to trade easier access to the outside world in exchange for abandoning the struggle against Israel to end the wider occupation.

Which leaves Gaza where it was before the Rafah border crumbled: an economic disaster zone, with more cigarettes and meat and fuel for now, but no more certainty about its future than before last Wednesday morning.

But for now at least one sentiment remains. 'It feels today,' Ameera says on the return journey home to Beit Hanoun after her first journey out after buying her cheese: 'that Gaza is not quite the same big prison any more.'

Not yesterday at least.

Gaza: A brief history

· A 225km rectangle on the Mediterranean, the Gaza Strip is squeezed between Egypt and Israel. With just under two million people, it has one of the world's highest population densities. Half of all the people in Gaza are refugees, or their descendants, from Israeli wars.

· It was in Gaza that Samson brought down the temple on himself and his Philistine captors.

· The Ottoman Empire ruled Gaza during the 19th century. Palestine came under British rule in the First World War, Egyptian rule in 1948 - during the Arab-Israeli war when Gaza's population tripled as Palestinians were pushed out of the new state of Israel. Israel captured the Strip in 1967 and has held it ever since.

· Lisa, a humanitarian worker in partnership with Oxfam, describes the daily struggle for food in Gaza: blogs.guardian.co.uk/food/2008/01/bread_tomatoes_and_despair.html