The Head of the Arab League is visiting the Gaza Strip, the first senior Arab official to do so since the Islamist militant group Hamas took over in 2007.
Amr Moussa's visit is partly intended to add to pressure on Israel to end its Gaza blockade, correspondents say.
Nine people were killed when Israeli troops boarded an aid flotilla trying to break the blockade on 31 May.
Israel and Egypt have blockaded Gaza since Hamas seized control of the Palestinian territory.
Mr Moussa's trip is also aimed at trying to heal a rift between Hamas and Fatah, who control the West Bank.
"This blockade which we are all here to confront must be broken and the position of the Arab League is clear," Mr Moussa said as he was met by Palestinian leaders at the Rafah crossing with Egypt.
Following the flotilla raid, Egypt opened its border with Gaza allowing people with valid passes to cross.
Mr Moussa met senior Hamas leader Ismail Haniya at his Gaza home.
Mr Haniya said Mr Moussa's visit was "a step toward the end of the blockade".
He met representatives of non-governmental organisations at a UN-run school damaged in an Israeli offensive 18 months ago.
He was scheduled to meet the leaders of other Palestinian factions before returning to Egypt.
The international envoy to the Middle East, Tony Blair, hinted that a partial lifting of the blockade could be agreed within days.
"There is a clear and intelligent distinction to be made," said Mr Blair, who represents the Quartet of the United Nations, United States, the European Union and Russia.
He told the BBC: "We stop weapons and arms coming into Gaza; on the other hand, we allow in items for normal daily life."
"I hope very much we can build on that distinction over the next few days and get a change in policy in the way we need," Mr Blair said.
Mr Moussa's trip is also aimed at finding a way of bringing two Palestinian factions, Hamas and Fatah together, says the BBC's Tim Franks in Jerusalem.
Hamas gunmen drove Fatah out of Gaza in 2007, and relations between the two groups remain strained.
The trip was announced soon after the flotilla of ships, led by the Turkish Mavi Marmara, were prevented from entering the waters off Gaza.
They were carrying 10,000 tonnes of aid, including building materials which are currently restricted under the terms of the blockade.
The Israeli government says the blockade is necessary to prevent Hamas and other militant groups launching rocket attacks on Israel.
The restrictions mean life for the 1.5 million population of Gaza has become crippling, correspondents say.
Many are still living in makeshift camps after their homes were destroyed in the Israeli incursion.
Last week US President Barack Obama said the blockade was "unsustainable" and pledged hundreds of millions of dollars in aid.
At the beginning of June Mr Moussa said the Arab League, a 22-member forum representing Arab nations, would go to the UN Security Council to demand the blockade be lifted.