Palestinian President Mahmoud Abbas and the Hamas-led government were locked in a deepening standoff on Friday over a senior security appointment, with officials on both sides trading heated accusations.
The dispute is the worst between Abbas and the Islamic militant group since it took office in late March after trouncing the president's long-dominant Fatah faction in January elections.
On Thursday, the new government appointed Jamal Abu Samhadana, high on Israel's most wanted list, to supervise the Interior Ministry and set up a new police force from militant factions to crack down on chaos in the Palestinian territories.
Abbas cancelled both decisions, drawing a sharp reaction from Khaled Meshaal, exiled political leader of Hamas.
At a rally in Damascus, Meshaal also accused some Fatah leaders of assisting a Western campaign to isolate the new government that has left it on the brink of financial collapse.
A key Fatah body accused Meshaal of trying to sow civil war.
"We can only describe the speech as sedition that aims to cause tension in the Palestinian field and instigate a civil war upon orders from his masters,"the Fatah Revolutionary Council said in a statement, without elaborating.
Gunmen take to streets
Hundreds of Fatah gunmen took to the streets in the Gaza Strip and the West Bank city of Ramallah late on Friday, some firing automatic rifles into the air. There was no sign of any armed Hamas supporters.
Fatah called for mass rallies on Saturday.
Abu Samhadana's elevation was widely seen as an attempt by Hamas to strengthen its grip on the Interior Ministry, which controls several security agencies, especially after Abbas appointed a loyalist, Rashid Abu Shbak, as its director-general.
In a presidential decree, Abbas cancelled the Hamas security decisions, saying they violated previous laws.
"All security leaders, officers and members of the security services are ordered not to deal with these decisions and regard them as if they never happened," said the decree, obtained by Reuters.
Hamas Interior Ministry spokesman Khaled Abu Hilal said the decisions would stand.
"We are not interested in any confrontation and we will seek to resolve differences (with Abbas) through dialogue," he said.
Hamas government spokesman Ghazi Hamad told reporters in Gaza senior aides to Hamas Prime Minister Ismail Haniyeh and Abbas would meet in Gaza on Saturday to discuss the issue.
The dispute is the latest between Abbas and Haniyeh, who has rejected the president's calls to pursue peace with Israel. Hamas is sworn to Israel's destruction.
Besides command over the 60,000-strong security forces and other government powers, the two men have argued over who should control crossing points into Gaza.
Under the Palestinian basic law, which functions as a constitution, the president has the power to veto top government appointments. Hamas said it viewed the law differently.
"The government has the right to form units to protect the homeland," Meshaal said. "We do not accept your decision."
Abu Samhadana leads the Popular Resistance Committees (PRC), an umbrella group of militants that has carried out attacks against Israel since a Palestinian uprising began in 2000.
Abbas issued the decree as he prepared for a trip to Jordan, Turkey, Norway, Finland and France to press for more aid.
The new government faces a crisis over cuts in foreign funding. Hamas has warned of economic collapse within months.
The United States and the European Union cut off direct aid to the Palestinian Authority after Hamas refused to renounce violence and recognise Israel's right to exist.
