Already busy searching for three Britons abducted nearby on Wednesday, officials moved quickly to defuse the stand-off at the Rafah terminal, whose opening last month was hailed as a step to make the Gaza Strip a testing ground for Palestinian statehood.
Unrest has been growing since Israel withdrew in September after 38 years of occupation. The power struggle among police, gangs and factions waging a 5-year uprising against Israel has also been stoked by a parliamentary election next month.
After the crossing was reopened, a 14-year-old stall vendor was killed in crossfire during a clash between a local clan and Police outside a Rafah police station, medics said.
Witnesses at the crossing said policemen, backed by gunmen from Palestinian President Mahmoud Abbas's Fatah faction, barred cars from entering the crossing and ejected would-be travellers.
The protesters dispersed within hours at the Palestinian Authority's behest and people flocked back to the crossing after it reopened.
The confrontation prompted European Union monitors, stationed at Rafah as part of a US-brokered deal to assuage Israeli fears that foreign fighters and arms would reach Gaza, to withdraw to the Jewish state and declare the border closed.
But with calm restored, a spokesman said the EU monitors were back and the crossing open as of 3:15 pm (1315 GMT).
"We returned to the border crossing after our evaluation showed the situation was stable once more," said the spokesman, Julio de la Guardia.
The protesting policemen were angered by the killing of a colleague on Thursday in a clash with the same Gaza clan at the same spot where the 14-year-old was killed on Friday.
In a statement co-signed by al-Aqsa Martyrs Brigades, a Fatah militant group, they called on Abbas to dismiss Interior Minister Nasser Yousef and police chief Ala Hosni for their failure to rein in Gaza chaos.
"Know that we will take decisive measures. The first step has been closing the Rafah crossing," they said.
The crossing was opened last month under a deal brokered by US Secretary of State Condoleezza Rice in hope of reviving the Gaza economy and efforts to end five years of fighting with Israel.
But the initial optimism dimmed with a surge of violence that shows little sign of abating. On Sunday, a "period of calm" declared by militants at the urging of Abbas is set to expire.
A suicide bomber from the militant Islamic Jihad killed an Israeli soldier and two fellow Palestinians in the occupied West Bank on Thursday, prompting Israeli vows of new army crackdowns.
The Palestinian Authority has failed so far to track down a British human rights activist abducted along with her visiting parents by gunmen in Rafah on Wednesday.
"They have not made any demand and they have not revealed their identities," Hosni told reporters. "We are chasing them and our hand will eventually reach those criminals."
Palestinians accuse Israeli Prime Minister Ariel Sharon of stoking unrest by expanding Jewish settlements in the West Bank, where they seek statehood along with Gaza.