It envisages the evacuation of over 8,000 Israelis from 21 heavily-fortified settlements in the Gaza Strip, and hundreds more from four settlements in the northern West Bank.
Israel will keep control of Gaza’s borders, coastline and airspace and reserves the right to re-enter the territory at will.
Each relocated family can expect to receive between $200,000 to $300,000 in compensation.
US Secretary of State Condoleezza Rice has said that the Israeli houses will be destroyed immediately after evacuation. In this case, Israel may pay the Palestinians as subcontractors in charge of clearing the debris.
Palestinian forces will be in charge on the ground, but Israel will continue to control the perimeter of the Strip and Gaza airspace, as well as patrolling the Gaza coast.
Israeli soldiers will remain on the 10-km Philadelphi Route between the Gaza Strip and Egypt
For Palestinians the withdrawal - even if successful - falls far short of their demands for an independent state, and even in Gaza many are gloomy about the prospects that their lives will significantly improved.
For in the near future the population will still live under the shadow of Israeli occupation in a narrow corridor of land, even if the settlements have gone and the Israel army has pulled back to more remote positions.
The Palestinian Authority line on the disengagement is both hot and cold: it is welcomed as “the beginning of the implementation of the roadmap leading to an independent Palestinian state”, but equally it is “a blueprint for Mr Sharon’s vision of an emasculated Palestinian state”.
Israeli officials have spoken, with varying degrees of candour, about how disengagement is an opportunity tighten Israel’s grip on occupied East Jerusalem and its settlements in the West Bank.