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In the handover ceremony the Israeli flag was lowered and replaced by that of the Christian militia in a sign UN troops would not be welcome.
Operation Litani, Israeli occupation in southern Lebanon, was launched following a Palestine Liberation Organisation (PLO) attack on the Tel Aviv-Haifa road which killed 37 people.
PLO troops were using southern Lebanon as a staging area for their attacks and Israeli forces moved in to destroy their bases.
Leader of the Christian militia, Major Saad Haddad hinted the reason for not trusting UN troops to hold off the PLO was due to their failure in the past.
However, United Nations Interim Force in Lebanon (Unifil) troops will be present in a number of Christian dominated areas.
The withdrawal follows a meeting on Monday at the United Nation's base at Nakura which ended with Israeli forces agreeing to withdraw and to allow Unifil members in.
It is believed the Christian militia, thought to have around 2,500 fighters, have gained a number of prime positions along the border territory from Mount Hermon to the Mediterranean.
They have been armed and trained by Israeli forces who have sworn they will return if the PLO attacks again.
Unifil representatives, Israeli generals and leaders of the Christian movement were all present at the UN meeting when the withdrawal was agreed.
But parts of the agreement have already been broken.
Israeli troops refused to allow reporters to pass through Israeli lines for a briefing with Unifil commander Major-General Emmanuel Erskine.
Camera film was destroyed during angry exchanges between the 150 assembled journalists and Israeli troops.
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