Palestinian leader Mahmoud Abbas opened the Gaza-Egypt border in a festive ceremony Friday — a milestone for the Palestinians who for the first time took control of a frontier crossing without Israeli veto powers and gained some freedom of movement.

The opening was seen as a step toward Palestinian independence and a boost to Abbas as he faces a fierce challenge by the Islamic militant group Hamas in Jan. 25 parliamentary elections.

"This is a great day. It is a day of happiness ... because it means an enormous step forward toward the freedom of the Palestinian people," Marc Otte, the European Union representative in the Middle East, told 1,200 guests attending the ribbon-cutting.

Abbas said he hoped the Palestinians' new gate to the world would spur investment, but said there can be no economic recovery without an end to lawlessness in the territories. "The magic key that can give us everything is the key of security," he said.

He also announced a majority security clampdown, saying it has already begun in some West Bank town and would also move to the West Bank.

Abbas reiterated that the election would be held on time, dispelling rumors he would seek a delay because of disarray in his Fatah party, which held primaries in some districts Friday.

The Rafah terminal on the Gaza-Egypt had been closed by Israel as its troops withdrew from the Gaza Strip in September. After two months of international mediation and a final push by Secretary of State Condoleezza Rice, Israel agreed that the Palestinians would run their side of the border, with the help of European monitors.

The crossing will open to Palestinian travelers Saturday, initially for four hours a day until the European monitors get settled. After the test period, opening hours will be expanded.

"From this moment, we feel we are free," said Fathia Najar, 55, one of a group of Palestinian travelers waiting near Rafah to cross the next day. "Before this, we lived in a jail."

Before the Israeli pullout, travel through Rafah was often difficult. The terminal was repeatedly closed on security grounds, and at times travelers waited for days to get through.

Heavy security ringed the terminal during Friday's ceremony, with police setting up roadblocks on access roads. Police officers also lined the main north-south road from Gaza City to Rafah.

The border deal backs Abbas' message that Palestinians can only gain independence through negotiations with Israel. Hamas says such talks are pointless and that it drove Israel out of Gaza by force.

Despite the Abbas-Hamas rivalry, Hamas leader Mahmoud Zahar attended the opening ceremony. "Our presence here does not mean we support this agreement," the Hamas leader said.

In preparation for the opening, the terminal was painted, workers replaced ceiling tiles and installed new lighting. Rows of blue and orange chairs filled the arrivals and departure halls, along with batteries of computers, X-ray machines, metal detectors and security cameras.

The key dispute between Israel and the Palestinians had been over whether Israel should get real time surveillance videos from Rafah and be allowed to veto the entry or departure of some passengers. In the end, Israel dropped both demands.

Otte, the EU representative, said the operation of the terminal would be a test for renewed Israeli-Palestinian cooperation, after nearly five years of bloody fighting.

Initially, 20 EU monitors will supervise Rafah operations, said Julio Delaguardia, spokesman for the contingent. He said the first group of monitors comes from Italy, Denmark, Romania and Luxembourg. In coming week, the group will grow to 70, with additional monitors from France, Spain, Portugal, Sweden and Finland.

He said he hoped all monitors would be in place within a month, to handle large crowds for an upcoming pilgrimage season to Saudi Arabia.