Laila El-Haddad interviews members of armed groups allied to Hamas and to Fatah to discover why they do what they do - read An eye for an eye in Gaza
The heavy clashes were taking place outside the main entrance of the Bureij and Nuseirat refugee camps in the central Gaza Strip, security sources and witnesses said.
Al Jazeera correspondent Nour Odeh said the situation was deteriorating quickly and that people had closed their shops and gone home.
She said fierce fighting had been reported from the northern Gaza Strip and in Gaza City and that a security compound had been razed.
Also on Thursday, Hamas said that an "Arab country" had shipped weapons to the presidential guard which is loyal to the rival Fatah faction.
Ismail Radwan, a Hamas spokesman, said: "A large cargo of weapons was transported yesterday."
He said the shipment passed into the Gaza Strip via Egypt through a crossing on the border between Egypt, Israel and the Palestinian territory.
"These weapons are intended for the presidential guard and the Fatah putschists," Radwan charged.
"Military Jeeps and shells are among these weapons which come from an Arab country, whose name we do not wish to divulge," he added.
Fatah denied having received any such shipment.
Abdelhakim Awad, a Fatah spokesman, said: "It's a slanderous accusation throwing water into the fire."
"It is pitiful to witness the bloody scenes in Gaza between the brothers"
Burhan Hammad, the head of Egypt's Gaza-based security delegation, also similarly branded the allegations a "total lie" that he said intended to push bitter rivals Fatah and Hamas into an "arms race".
The two factions have been locked in a power struggle since Hamas formed a government last March after a landslide victory over Fatah at the polls.