Hatem al-Maghari was arrested and convicted of murder after the brutal lynching of two Israeli soldiers in 2000, but was released this week after new evidence emerged, the Israeli army said.
He arrived in Gaza overnight, he said, and returned to his family in Rafah in the south of the Palestinian enclave.
"The feeling of freedom is indescribable," he told AFP by phone from his family home. "I didn't kill anyone."
Maghari said he was working as a police officer in the Palestinian city of Ramallah in the occupied West Bank when two Israeli reservists drove into the city by mistake.
They were taken to a police station for their own safety but images filmed by an Italian television channel showed the crowd storming the station.
Later, the crowd was seen striking one of the soldiers who had apparently been beaten to death.
A photo of another man with bloody hands screaming with joy at the window after the deaths became an iconic image from the second Palestinian intifada, or uprising.
He was still found guilty of aggression against a soldier and not preventing an offence and sentenced to 11 and a half years in prison, the army said, but with time already served was released immediately.
In 2012, Israel announced it had dismantled a network of the Palestinian Islamist movement Hamas in the West Bank, including two men accused of killing the two soldiers.
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