At least 32 Hamas supporters were wounded by gunfire in the West Bank city of Ramallah, hospital officials said. Several were in critical condition, they said.

Tensions were at their highest in a decade and followed months of failed talks to form a unity government between the ruling Hamas Islamist faction and Abbas's once-dominant Fatah.

The violence broke out after Hamas, which controls the Palestinian Authority, accused a Fatah strongman and Abbas's presidential guard of trying to kill Prime Minister Ismail Haniyeh outside the Rafah border crossing with Egypt.

Although Israel was not involved in the latest fighting, its decision -- with U.S. backing -- to prevent Haniyeh from entering Gaza with $35 million intensified the standoff in which Haniyeh's convoy came under fire late on Thursday.

"We know who opened fire (on Haniyeh's convoy) and they will be punished hard. From now on they will never relax and they will never sleep tight in their homes," said Hamas leader and Palestinian Foreign Minister Mahmoud al-Zahar.

One of Haniyeh's bodyguards was killed in the incident at Rafah on Thursday. Another bodyguard, the prime minister's son and a political adviser were wounded.

Friday's fighting in the occupied West Bank was the fiercest since Hamas came to power in March after trouncing Fatah in January elections.

In downtown Ramallah, Abbas's security forces, dressed in riot gear, used clubs and rifle-butts to beat back Hamas demonstrators before shooting broke out.

At about the same time, Hamas and Fatah forces in the Gaza Strip fired at each other on the streets. In a show of force, Hamas has deployed hundreds of heavily armed militants in Gaza City and other areas.

Hamas spokesman Ismail Rudwan singled out by name Fatah strongman and lawmaker, Mohammed Dahlan, as being behind the shooting attack late on Thursday on Haniyeh's convoy as it was leaving the Rafah border crossing between Gaza and Egypt.

He called on Abbas to remove his presidential guard from the streets.

Dahlan said on Al Arabiya television that the accusations "are not worth answering". He blamed Hamas "gangs" for the violence, which has surged since unidentified militants shot dead three young sons of an intelligence official loyal to Abbas outside the boys' school early this week.

"It (Hamas) is pouring oil on the fire," said Abdel-Hakim Awad, a spokesman for Fatah in Gaza.

Abbas aide Saeb Erekat said Hamas had issued "a clear call for extremism and bloodshed."

$35 MILLION

Abbas still plans on Saturday to outline his options in the wake of months of failed talks with Hamas to form a unity government, Palestinian officials said.

Some Abbas aides say he might announce he has no choice but to call a referendum on elections, although he may not set any dates and leave the door open to fresh talks. Abbas might also decide emotions are too high, and refrain from overt threats.

"Mohammed Dahlan bears the direct responsibility for the assassination attempt which targeted the prime minister and he bears responsibility for the blood of the martyrs in the incident," Rudwan told a news conference in Gaza.

Rudwan offered no evidence of Dahlan's involvement.

Abbas has been expanding his presidential guard with U.S. assistance, and Dahlan has long been a target of Hamas criticism for his close ties to Washington.

Rafah's closure by Israel on Thursday marked an escalation in Israeli efforts to prevent Hamas from bringing in funds.

For months, Israel had watched as top Hamas ministers, lawmakers and officials openly bypassed a Western aid blockade by carrying suitcases full of cash through the crossing.

Israel let Haniyeh return to Gaza on Thursday only after he agreed to leave behind the $35 million he was carrying from a fundraising tour to Iran and other countries in the region.

© Reuters 2006

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