Denmark has warned its citizens living in the Muslim world to beware of attack amid mounting protests and a boycott on Danish goods after a newspaper published a series of cartoons showing the Prophet Muhammad.

Jyllands-Posten, the largest newspaper in Denmark, published 12 cartoons of Muhammad in September. The images, which include a depiction of Muhammad's head as a bomb with a lit fuse, were republished last month by a Norwegian newspaper.

As awareness of the cartoons, which have been posted on the internet, has gradually spread across the Middle East, outraged Muslims have responded with protests and death threats against the authors.

Saudi Arabia has withdrawn its ambassador in Copenhagen because of the insult. Libya has closed its embassy altogether. Egypt is rumoured to be considering a similar snub.

Islam forbids any portrayal of Muhammad, even complimentary images, because it is considered idolatrous. In another of the offending cartoons, Muhammad is shown brandishing a curved dagger and turning suicide bombers away from heaven because "We have run out of virgins".

Today's warning advises Danes in Algeria, Egypt, Syria, Jordan, Lebanon, Pakistan, Saudi Arabia, Israel, the Palestinian territories and Iran to be careful. The sternest warning is offered for those in Saudi Arabia, where "Danes who choose to stay... should show extraordinarily high watchfulness".

A spokesman for the Danish Foreign Ministry in Copenhagen said that the warning was issued because of a rapid increase in the intensity of the campaign against Danish businesses in the Middle East over the last few days. The Danish Red Cross has already withdrawn two aid workers from Yemen and Gaza.

This morning, gunmen in the Palestinian territories gathered outside the European Union headquarters in Gaza City and fired in the air, demanding an apology for the cartoons, saying Danes and Norwegians were at risk of attack.

"We warn the citizens of the above-mentioned governments to take this warning seriously because our groups are ready to implement it across the Gaza Strip," one of the gunmen said, reading from a prepared statement.

Danish flags were burned in the busy weekend of Palestinian protests that followed the victory of Hamas in parliamentary elections. In one of its first statements since winning power, the Islamist group said it encouraged other Muslim countries to take "deterrent steps against idiotic Danish behaviour".

"We call on Muslim nations to boycott all Danish products because the Danish people supported the hateful racism under the pretext of freedom of expression," it said in a statement.

In Saudi Arabia and around the Persian Gulf, a full-scale boycott of Danish goods is in place. Arla Foods, Europe’s largest dairy group which is based in Denmark, has been especially hard hit, with its products removed from shelves in Saudi Arabia, Kuwait, Qatar, Bahrain and the United Arab Emirates.

"All Arla’s customers in the region have canceled their orders, and sales have come to a standstill in almost all markets," said Jens Refslund, an Arla Foods division manager. Arla Foods previously sold 2.6 billion kroner (£240 million) in goods and employs 1,000 people in the region.

The boycott, organised around websites such as www.no4denmark.com, was criticised by Peter Mandelson, the EU Trade Commissioner, who today threatened to report Saudi Arabia to the World Trade Organisation for its tacit support of the ban.

"He made it clear that if the Saudi government had encouraged the boycott, Commissioner Mandelson would regret having to take the issue to the WTO," said Peter Power, an EU spokesman .

The Danish government has been at pains to distance itself from Jyllands-Posten, saying it is a private newspaper. But it has refused to condemn the cartoons, which have been described by the world’s biggest Muslim body, the Organisation of the Islamic Conference (OIC) as 'blasphemous', instead issuing statements stressing its support for religious tolerance.

Jyllands-Posten has also defended the caricatures, citing freedom of the press, but in an editorial last week Carsten Juste, the newspaper's editor-in-chief, did apologize for any offence caused to Muslims. "We maintain the right to freedom of expression, but we are saddened that we have offended Muslims’ faith. That was not our intention," he wrote.

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