Hamas dramatically escalated its offensive to seize control of Gaza yesterday, issuing an ultimatum to its Palestinian rival, Fatah, to surrender by the weekend.

As the Islamist group’s fighters advanced systematically across the Mediterranean strip, seizing control of key security posts, main roads and government buildings, its most spectacular attack was the detonation of a one-tonne tunnel bomb under a Fatah security headquarters in Khan Younis. The ambush, which was apparently weeks in the planning, killed at least six and appeared to give Hamas control of the strategic southern town.

Hamas now appears poised to defeat the Fatah-dominated Palestinian security forces of President Abbas, paving the way for a possible Islamist state in Gaza.

This raises the prospect of a two-headed Palestinian entity: the West Bank ruled by Fatah, and Gaza by Hamas. Although victory was far from assured, the balance certainly appeared to have swung the way of Hamas.

Blockade drains life from Gaza

The movement of goods into Gaza had been intermittent at best since Hamas won Palestinian elections early last year

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• Now war is with the enemy within

• The little girl trapped by a quirk of war

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In the important border town of Rafah its fighters were basking in the sun yesterday and brandishing rocket-propelled grenades, bazookas and Kalashnikovs. They had already hoisted bright green Hamas flags over the smouldering wreckage of the border post as reports emerged of Fatah forces fleeing across the border into Egypt.

Last night Hamas demanded the immediate surrender of the remaining Fatah forces holed up in three compounds in the centre of Rafah. ”Surrender or you will all die,” a Hamas fighter urged them through a megaphone heard throughout the city. “You are all surrounded. You have no escape. All your lines of supply are cut.”

The demands were followed by volleys of heavy mortar and gunfire. The announcements were being made from the tallest building in the vicinity, the Abrar mosque. Illuminated by a green neon light, the mosque is situated within rocket-propelled grenade range of all three Fatah compounds.

Hamas scored a symbolic victory when hundreds of Fatah loyalists from the Bakr family, one of Gaza City’s most influential clans, surrendered to Hamas militants who had laid siege to their compound.

The brutality of recent fighting was underscored at the funerals of two opposing fighters yesterday. In the northern Gaza town of Beit Lehiya, medical staff told The Times that the Fatah commander Jamal Abu Sedian was shot 41 times after being pulled out of an ambulance inside the gates of the Kamal Adwan hospital. In Beit Lehiya another victim, a Hamas guard, was gunned down in a retaliatory killing while eating his lunch.

Tony Blair and the US have spoken publicly of the need to support Mr Abbas and have spent tens of millions of dollars supplying weapons and training to bolster his fragmented forces in their power struggle against Hamas.

Khaled Abu Hillal, a Hamas spokesman for the Interior Ministry, predicted recently that any weapons supplied to Mr Abbas’s forces would eventually backfire on Israel and its Western allies.

It is too early to say whether the Fatah balloon in Gaza has finally burst: it remains well funded and well armed and has high levels of historic support on the streets.

However, the stage appeared set for a final showdown at Mr Abbas’s presidential compound in Gaza City. He said that the violence was heading towards the point of no return. “Without a stop to fighting, I believe that the situation will collapse in Gaza.”

His Fatah faction has suspended its participation in the Palestinian unity Government until the fighting ends.

At least 81 Palestinians have been killed since the latest round of violence erupted on Saturday and dozens more have been wounded. Many Palestinians in Gaza have been hiding in their homes, some without water or electricity.

Yesterday about 1,000 Palestinians protesting against the violence marched through Gaza City, drawing gunfire that killed two of the demonstrators and wounded four others. The prospect of Hamas taking control of Gaza has terrified its secular residents, who fear that Islamist rule will be imposed.

Many worry that Gaza will become even more financially and diplomatically isolated from the West, which has refused to deal with Hamas over its refusal to recognise Israel.

But Hamas supporters said that its control over Gaza would bring law and order to its war-torn streets.

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