In a day filled with emotion and a sense of history, the Palestinians in return voted to revoke the controversial clauses in the Palestinian charter that call for the destruction of Israel.
Mr Clinton said the Palestinian people were free to "determine their own destiny on their own land".
Yasser Arafat, the Palestinian leader and head of state designate, called on the meeting of Palestinian officials and members of the Palestinian parliament to nullify the offending clauses. Israel has demanded they be revoked before proceeding with its limited withdrawal from the West Bank.
The vote may prove decisive in restarting the Wye peace agreement. David Bar-Illan, a senior adviser to Benjamin Netanyahu, the Israeli Prime Minister, said: "The issue, as far as we are concerned, is now off the table." Israel is due to withdraw from another 5 per cent of the West Bank at the end of the week.
President Clinton's visit to Gaza is also seen by Mr Arafat as marking an end to the long era of confrontation between the United States and the Palestinians. He said: "I reaffirm to you what I told you in the White House, that I will continue the peace process away from violence and confrontation."
In the first speech by an American president to the combined Palestinian leadership, and the first visit to the Occupied Territories, Mr Clinton praised the Palestinians for voting to revoke the anti-Israel clauses. "You did a good thing today by raising your hands," he said. "You know why? It has nothing to do with the government of Israel. You touched the people of Israel."
President Clinton's emphasis on the need to conciliate the Israeli public stems from his doubts about the willingness of the Israeli Prime Minister to carry out the letter of the Wye Agreement on withdrawal from the Occupied Territories. To stay in office, Mr Netanyahu needs the support of the far right which does not want a pull-back.
Mr Clinton's arrival by helicopter in Gaza took place under tight security with checkpoints every few hundred yards on all the city's roads. Patrol boats guarded the foreshore and few of the one million Palestinians in Gaza - 60 per cent of them refugees - caught so much as a glimpse of the US President.
The city was draped in American Stars and Stripes, which for the last 30 years have only been displayed in Gaza to be burnt in protest at US support for Israel. Hillary Clinton, who, unlike her husband has declared her support for a Palestinian state, was mobbed by children when she visited Shati refugee camp in central Gaza.
President Clinton praised Mr Arafat for not walking away from the negotiations with Israel when he had many reasons to do so. He said he understood Palestinian grievances over Jewish settlements, land confiscations and house demolitions. And in a marked change of tone from that used by previous US presidents, he referred to the Palestinian "history of dispossession and dispersal".
During the presidential visit, a halt has been put to the recent wave of demonstrations and riots over the continued imprisonment of Palestinians by Israel. Four Palestinians have been killed in violence on the West Bank as Mr Arafat comes under pressure from his own people not to let his pursuit of an understanding with the US lead to Palestinians remaining in jail for carrying out his orders.
The Palestinian charter, written in 1964, has been a matter of dispute between Israel and the Palestinians since peace talks started. Mr Arafat insists the disputed clauses were revoked by the Palestine National Council two years ago with the agreement of the US and the previous Israeli government. Mr Netanyahu said it had not been properly nullified and insisted on yesterday's show of hands.
Yesterday's vote should open the way for a three-way meeting between President Clinton, Mr Arafat and Mr Netanyahu to discuss differences over the implementation of the Wye Agreement, which has been frozen by Israel. Nathan Sharansky, a member Mr Netanyahu's inner cabinet, said last night that he expected the meeting to take place.
Mr Netanyahu welcomed the revocation of the charter, but claimed it was the result of his pressure. He added that there were other conditions which the Palestinians would have to meet but did not say if this week's Israeli withdrawal would take place.Reuse content