Some 12,000 Palestinian police officers will begin moving in to take their place.
At a certain point, the Palestinian officers did stand back.
A force of about 100 Palestinian police officers stood guard.
The security officials also said Palestinian officers had made some efforts to stop terrorist attacks.
A young Palestinian officer was ordered to go out and direct traffic.
Palestinian police officers refused to comment on the death, but the area around the building was sealed off.
But, they said, the Palestinian officers took no action.
The Palestinian officer was killed when his fire was returned.
The soldiers had informed senior Palestinian police officers, the spokesman added.
Aside from local merchants, contractors building a house and a few Palestinian police officers who live here, no one is going to work.