Hamas says it has taken full control of the Gaza Strip, hours after President Mahmoud Abbas sacked the Hamas-led government and declared an emergency.
Hamas fighters secured the presidential compound in
Mr Abbas says there will be a caretaker administration and early elections.
But PM Ismail Haniya, of Hamas, says his government will press on and he will impose decisive law and order.
Overnight the green flags of Hamas were flying over most parts of
Earlier Hamas fighters had overrun remaining Fatah positions including the headquarters of Fatah's Preventative Security force and the presidential compound in
Fatah fighters were seen being led away, stripped to the waist, their fate unknown.
"All of the headquarters of the security services in the Gaza Strip are under control of the Ezzedine al-Qassam Brigades, including the presidency," Abu Obeida, a spokesman for Hamas's armed wing, told the AFP news agency.
The BBC's Matthew Price in
But Mr Haniya rejected the notion of a separate
But Mr Abbas said he would now rule by presidential decree until the conditions were right for elections.
Under the Palestinian Basic Law, essentially the Palestinian constitution, the president can rule by decree for 30 days. This can be extended with the approval of the parliament.
There are new fears violence will spread to the
The al-Aqsa Martyrs Brigades, affiliated to Fatah, has called for "martial law" and the complete deployment of the Fatah movement.
It said its members "should consider the Hamas organization in all areas of the
Aid suspended
US President George W Bush said he was "profoundly concerned" over the deepening crisis and called for a halt to the violence.
His Secretary of State Condoleezza Rice gave her backing to Mr Abbas, saying he had exercised his "lawful authority".
"We fully support him in his decisions to try to end this crisis for the Palestinian people and to give them an opportunity to return to peace and a better future," she said.
UK Foreign Secretary Margaret Beckett also expressed regret over the dissolution of the government.
"Once again extremists carrying guns have prevented progress against the wishes of the majority who seek a peaceful two-state solution," she said.
The crisis has also prompted the European Commission to suspend humanitarian aid to the Gaza Strip.
Hamas won a surprise victory in Palestinian elections in early 2006 but has since been engaged in an intermittently violent power struggle with Fatah.
Hamas, an Islamic organization, rose to prominence in
Fatah, a secular political grouping headed by Mr Abbas, ran the Palestinian Authority until 2006 and officially recognizes the Jewish state.
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Hamas militant