On Tuesday, the army said crossings from the West Bank and Gaza into Israel would be closed to Palestinians for 11 days until midnight on October 14.
But on Friday they decided those with pre-existing work permits would be allowed in "according to the needs of the market", an army spokeswoman told AFP.
The decision applies to Palestinians working in agriculture and hospitals, according to media reports.
Tens of thousands of Palestinians work inside Israel, where they can find higher salaries.
Israel, which controls access to the Palestinian territories, regularly closes them off during Jewish holidays, citing security fears.
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But the closure announced Tuesday was unusual in its length.
Israeli media saw it as a reaction to a September 26 attack at the entrance of a West Bank settlement in which three people were killed.
The Palestinian attacker, who was shot dead, had a permit to work inside the settlement and the incident raised fear of attacks during the holiday period.
Sukkot, which continues until October 12, commemorates the Jewish journey through the Sinai after their exodus from Egypt. This year, it is followed by a weekend.
The holiday sees thousands of worshippers head to the Wailing Wall, one of the holiest sites for Jews in the Old City of Jerusalem, to pray.
The location is close to Islam's third holiest site, the Haram al-Sharif compound, known to the Jews as the Temple Mount, which was the focus of angry protests in July after Israeli forces limited access over the killing of two police officers.