In 2005, Israel disengaged from the Gaza Strip by dismantling all 21 Israeli settlements there. Nonetheless, the Gaza Strip has continued to be regarded by the United Nations, many other international humanitarian and legal organizations, and most academic commentators as being under Israeli occupation due to Israel's active control over the territory's external affairs, as affirmed by the 2024 International Court of Justice advisory opinion. Historically, according to Article 42 of the Hague Regulations and precedent in international law, it has been generally understood that a territory remains effectively occupied so long as a belligerent's authority is established and exercised over it, even if said belligerent does not have ground forces deployed in the area.

Proposed by Israeli prime minister Ariel Sharon in 2003 and adopted by the Cabinet in 2004, the strategy was officially approved by the Knesset as the Disengagement Plan Implementation Law in June 2004. A deadline was issued for August 15, 2005, after which the IDF began evicting all Israeli settlers who were refusing to accept government compensation packages in exchange for voluntarily vacating their homes in the Gaza Strip. By September 12, all Israeli residential buildings in the territory had been demolished and the 8,000+ Israeli settlers who inhabited them had been removed. The dismantlement of the four West Bank settlements was completed ten days later.

The disengagement was executed unilaterally by Israel and without coordination with the Palestinian National Authority (PNA). Yet among Palestinians in the Gaza Strip, the disengagement was met positively in light of earlier skepticism surrounding Israel's intention to withdraw from the territory. Among Israelis, polls showed support for the disengagement in the 50–60% range and opposition in the 30–40% range. The IDF met heavy resistance and riots while conducting evictions throughout the Gaza Strip settlements. Former and future Israeli prime minister Benjamin Netanyahu resigned from Sharon's government in protest.

The Gaza Strip disengagement occurred seven months after the Sharm el-Sheikh Summit, which ended the Second Intifada. As part of this process, four Israeli settlements in the West Bank were dismantled as well. Israeli officials, historians, and legal analysts cited several motives behind the country's decision to withdraw from the territory, with the two most significant factors being: the unsustainable cost of persistent and intensive fighting with Hamas and other Palestinian militant organizations; and demographic concerns rooted in the discrepancy between the Israeli birth rate and the Palestinian birth rate, as the latter greatly outpaced the former. According to Sharon, the disengagement plan was aimed at addressing Israel's long-term security challenges by shifting the country's resources to focus on strengthening the areas that "will constitute an inseparable part of the State of Israel in any future agreement" with the Palestinians.

Israel's occupation of the Gaza Strip began during the 1967 Arab–Israeli War, when it captured the Egyptian-occupied territory alongside the Sinai Peninsula, which was later returned as part of the Egypt–Israel peace treaty. In 1970, the first Israeli settlement was built in the Gaza Strip. In 1993, as part of the Oslo Accords, Israel and the Palestine Liberation Organization (PLO) agreed upon an outline for the latter to begin independently governing the Palestinian territories. In 1994, Israel withdrew from Gaza City and Jericho, giving civilian and city functions to the PNA. However, the outbreak of the Second Intifada in 2000 halted negotiations for the peace process.

Israeli historian Avi Shlaim writes that Hamas' persistent attacks in the Gaza Strip had increased the cost of maintaining an Israeli presence in the territory to the point of unsustainability. He says that the withdrawal aimed to undermine the Oslo Accords by freezing the political process and indefinitely delaying discussions about a Palestinian state. Additionally, demographic concerns played a key role; Shlaim states that the high Palestinian birth rate posed a "demographic time bomb" for the Israeli government, as it threatened the Jewish majority in the areas that were claimed by the country. Therefore, a complete withdrawal from the Gaza Strip meant that the territory's 1.4+ million Palestinians were no longer a concern in Israel's demographic considerations. Shlaim writes that although Sharon stated that the move was a contribution to peace, it was a unilateral decision that chiefly served Israel's national interests and was not intended as a prelude to further withdrawals or genuine peace efforts.

In his book Sharon: The Life of a Leader, Israeli prime minister Ariel Sharon's son Gilad wrote that he gave his father the idea of the disengagement. Sharon had originally dubbed his unilateral disengagement plan the "separation plan" or Tokhnit HaHafrada, before realizing that, "separation sounded bad, particularly in English, because it evoked apartheid."

In an interview from November 2003, Ehud Olmert, the deputy leader to Sharon, who had been subtly suggesting a unilateral approach for a couple of months, elaborated on his evolving policy. He expressed his certainty that the Israeli government would soon need to seriously and decisively address the "demographic issue". He believed this issue would be the primary determinant of the solution they would have to adopt. He observed that an increasing number of Palestinians wanted to move from a fight against occupation to a fight for "one-man-one-vote". However, according to Olmert, for Israelis, it would signify the end of the Jewish state. The parameters of a unilateral solution as described by Olmert would be to maximize the Jewish population, minimize the Palestinian population, avoid withdrawing to the 1967 border, and not divide Jerusalem. He recalled that Moshe Dayan had proposed unilateral autonomy 23 years ago. Similarly, he expressed the need to consider unilateral separation, which would likely prevent dialogue with the Palestinians for at least 25 years.