Thousands of Israeli soldiers marched into the isolated settlement at daybreak, with troops bracing for a showdown with hardline settlers who had taken refuge inside synagogues to block their forcible ejection from the Palestinian territory.
Witnesses have described scenes of chaos in Kfar Darom, one of the most defiant settler bastions.
Troops, bombarded with appeals to refuse their orders, waited impassively outside the building while prayers were said inside.
Military sources say Kfar Darom is one of seven settlements to be evacuated on Thursday.
Israelis hauled into army buses set fire to two seats, forcing troops to drag them out and bundle them into other coaches, according to AFP.
Families were seen dragged out of homes one by one by police and soldiers who are backed up by bulldozers.
Sobbing and hysterical settlers were carried off by forces towards buses.
Israeli forces are also bracing for a showdown with settlers in the largest settlement of Neve Dekalim, where a reported 2,000 people are holed up in the main synagogue.
Witnesses said hundreds of youths have been massed on the roof and the balconies of the synagogue, waving flags and banners protesting the pullout.
Regional police commander Roni Ohana said 1,500 soldiers and police are on standby to enter the synagogue when the order is given.
Troops also moved in to Gaza’s first settlement Netzer Hazani and Gan Or in the south of the territory.
Israeli gunboats have been spotted in the Mediterranean sea heading towards the hardline beachside community of Shirat Hayam.
The settlements of Atsmona, Slav and Rafiah Yam, are also due to be evacuated on Thursday.
More than half of the 21 Gaza settlements were cleared on the first day of the operation on Wednesday and Israeli officials have said the operation may be over within days, not weeks as expected.
However the tensions have not been without bloodshed, with a Jewish settler killing four Palestinians in the West Bank on Wednesday.
Nevertheless, many Israelis have expressed praised for the role of police and soldiers tasked with forcing fellow Jews from their homes.
The operation marks the first time Israel has withdrawn from Palestinian territory captured in the 1967 Arab-Israeli war, and has raised hopes for a new breakthrough in the Middle East peace process.