A Palestinian security chief was killed today when his car blew up in Gaza as violent confrontations continued between supporters of the Hamas-led Palestinian government and President Mahmoud Abbas's rival Fatah faction.

Nabil Hodhod, the area commander of Preventive Security for central Gaza, died in the bomb explosion and his deputy was wounded. Hodhod was an ally of Mr Abbas, who is the head of Fatah.

Earlier, masked gunmen in Gaza had killed a member of the Hamas Islamic militant group and wounded four others in a dawn raid. Hamas members said that they held Fatah gunmen responsible, claiming that the kidnappers were members of the Preventive Security Service.

News of tonight's car bomb came as both sides were attempting to step back from the brink, fearing civil war. Tit-for-tat violence has escalated amid a growing power struggle between the rival Palestinian factions, after Hamas formed its own security militia in defiance of the official security forces controlled by Mr Abbas.

In a bid to cool tensions, Hamas and more moderate Fatah held talks attended by Ismail Haniya, the Prime Minister. "The two groups urge their members, grassroots supporters and sympathisers to implement the agreement," Samir al-Mashhrawi, an Abbas loyalist, told reporters.

The crisis talks between Palestinian leaders were due to continue tomorrow, hosted by Mr Abbas.

In the first incident, unidentified gunmen snatched three Hamas members outside a mosque near the southern Gaza town of Khan Younis, opened fire and then dumped them at a local gas station. The men sustained stomach and leg injuries and one died later in hospital. He was identified as Salem Kadih, 22.

While no group claimed responsibility for the mosque kidnapping, relatives of the victims blamed gunmen from Fatah. In a separate incident, another two Hamas members were injured in a drive-by shooting in Gaza City, according to Hamas sources.

Angered by the kidnappings, hundreds of armed men claiming allegiance to Hamas marched through the streets of Gaza in protest, brandishing assault rifles and copies of the Koran. The demonstrators shouted: "We are with the Hamas government standing against corruption."

Marching in military formation and firing rifles into the sky, one leader shouted: "What’s your goal?" The crowd replied: "Allah." The leader asked: "What’s your path?". The rallying reply was: "Jihad."

Confusingly, the protesters wore T-shirts identifying them as Fatah supporters. One press report said that the demonstrators were Fatah defectors loyal to Khaled Mussa Abu Hilal, an ex-Fatah official who went to work for the Hamas government shortly after the Islamists won elections in January. The Fatah Central Committee promptly expelled Abu Hilal, who is now a spokesman for Hamas's Interior Ministry.

"Today we say that our closest brothers are Hamas. Fatah, they are the ones who are ruining our country," said Ismail al-Ishqar, a 21-year-old who was formerly in the Al-Aqsa Martyrs’ Brigades, an armed Fatah offshoot.

Recent weeks have seen gunfights, car-bombings and drive-by shootings as gang war has erupted between the rival groups. The clashes have left nine dead and scores injured and marks the culmination of a decade-old rivalry that some fear is distracting efforts from securing a peace initiative with Israel.

Meanwhile violence continued on another front, when four Palestinians were killed in a shoot-out with the Israeli army in the West Bank town of Ramallah, as undercover Israeli forces went to make a second arrest of an Islamic militant.

Palestinian police said that the shooting began when an undercover Israeli unit driving a Ford sedan was fired on by militants, and set on fire. Israeli soldiers shot and killed a Palestinian police officer and three civilians, and wounded more than 30 others, before leaving Ramallah with the militant, Mohammed Shubaki, an Islamic Jihad leader, the Palestinians said.

Television footage showed the streets of central Ramallah deserted except for a few jeeps, as smoke rose from nearby buildings.

In Israel, Cabinet Haim Ramon, the Justice Minister, warned that Israel would move with plans to draw its final borders if Hamas did not recognise Israel and renounce violence within six months.

"If these things don’t happen, we won’t wait for years, but rather we will wait until the end of this year," Mr Ramon told Israel Radio.

Mr Ramon, a close associate of Ehud Olmert, the Israeli Prime Minister, spoke just hours after George Bush, the US President, referred in surprisingly warm tones to the Israeli leader’s plan to withdraw unilaterally from chunks of the West Bank. Mr Bush called the idea "an important step" toward peace.

Dov Weisglass, one of Olmert’s most senior advisers, said that if negotiations fail, "Israel will carry out a broad unilateral process that will in the end leave in Israel’s hands the ... large settlement blocs."

Mr Weisglass said that Israel will have contacts with the moderate Abbas, but will not hold peace talks with him unless Hamas changes its positions.

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