Gunmen kidnapped a German man from a hotel in the West Bank city of Nablus this evening after threats to foreigners over the publication in Europe of cartoons depicting the Prophet Mohammad.
The militants later handed him over unharmed to Palestinian police.
A leading Danish dairy product company, Arla Foods, is laying off 125 staff as a result of a boycott of its products in protest against the publication of cartoons of the Prophet Mohammed in Denmark.
Arla Foods is Denmark's leading exporter to Arab countries.
The BBC today broadcast brief newspaper images of the cartoons in its lunchtime news. The broadcast was intended to help audiences understand the strong feelings sparked by them, BBC sources said.
Single cartoons have also been printed in newspapers in Germany, Italy, the Netherlands, Portugal, Spain and Switzerland.
The controversy widened today, with Afghanistan's President Hamid Karzai condemning the cartoons, saying they were an insult to Muslims across the world.
He welcomed the sacking of an editor of the French newspaper France-Soir for reproducing the images first published in a Danish newspaper last year.
But today's edition of France-Soir defended its decision to print the pictures.
'Imagine a society that added up all the prohibitions of different religions,' it wrote in an editorial. 'What would remain of the freedom to think, to speak and to come and go?'
Representatives of France's five million Muslims have threatened to take the newspaper to court, calling the reprinting a provocation.
In Gaza City, the militants who surrounded the EU offices have left the area having put a notice reading 'Closed Until Further Notice' on the front door.
They warned the Danish, French and Norwegian governments to apologise for the cartoons.
The militants from Islamic Jihad and an armed faction of Fatah fired shots in the air and climbed onto surrounding walls to protest against the publication.
They set a deadline of 48 hours for an apology from publishers who printed the cartoons, one of which shows the prophet Mohammed wearing a turban shaped like a bomb.
They threatened to raze the EU complex to the ground if what they described as the assaults against Islam and against the Prophet Mohammed continued.
The Norwegian government has announced that it has closed its mission in the West Bank in response to the threats.
An EU official said threats to staff were 'unacceptable'. All EU staff left the building just before the protest started and have now returned to work.
Palestinian groups threatened to target French, Danish or Norwegian citizens in the Gaza Strip and the West Bank following the publication of the cartoons.
