She said doctors at local hospital had been "overwhelmed" by casualties and that the death toll could rise.
 
Dr Muawiyah Hassanein, head of Gaza's emergency medical services, said seven people, all civilians, were killed and 80 people, including several Hamas security personnel, were wounded.

Fatah reaction
 
Salam Fayyad, the Palestinian prime minister, said in a statement from his office: "Senior officials in Hamas ordered these crimes which were carried out by the Hamas militia in order to terrify the people ...  Now their punishment is a national duty."

Mahmoud Abbas, the leader of Fatah and Palestinian president, on official television denounced "these horrible crimes committed by a band of rebels ... before the eyes of the entire world".
 
As tensions spilled over between fellow Palestinians in Gaza, Abbas was in the Egyptian capital trying to win more support from Arab neighbours before the planned Annapolis peace conference in the US.
 
In Cairo, he met Hosni Mubarak, the Egyptian president, and Amr Moussa, the Arab League secretary-general, as well as the visiting foreign policy representative from the European Union.
 
Abbas then flew on to Turkey where he is scheduled to attend a summit on Tuesday with Recep Tayip Erdogan, the Turkish prime minister.
 
Trading charges
 
Fatah officials accused Hamas forces of opening fire from the nearby Islamic University, but Hamas said its men had come under attack from Fatah fighters and fired back.
 
"Before the rally, Fatah militants were deployed throughout the area," said Ihab al-Ghosein, spokesman for the Hamas-controlled interior ministry.
 
"Fatah is responsible for continued incitement against the Palestinian police, and there was a clear attempt to bring back chaos."
 
In video


Arafat's legacy in the words of nephew Nasser al-Qedwa

But Abdullah Abdullah, a senior member of Fatah, told Al Jazeera: "Today is a massacre that is a dark stain on the history of Hamas, the leaders of Hamas and those who executed the attack.
 
"This was a national event for the Fatah movement," he said, speaking of the rally.
 
"For Fatah members to come out and remember their leader [Arafat] is not a crime. For the Executive Force, guided by Hamas and ordered by Hamas, to open fire ... is really opening a new page in the civil war in the Gaza Strip and probably beyond."

A Fatah official later said that Hamas security forces had arrested several of its activists, including Mohammad al-Nahal, a senior Fatah political leader in northern Gaza.

Tense atmosphere
 
Hamas had broken up some smaller demonstrations organised by its rival on Sunday, the third anniversary of Arafat's death.
 
Speaking at Monday's rally before the gunfire broke out, Odeh called the atmosphere in Gaza City "quite tense".
 
"Fatah promised everyone a show of force and presence in Gaza and a show of force they certainly did show," she said.
 
"[The rally] has surpassed all expectations [of the number of people attending]."
 
Hamas had set up checkpoints on the main north-south road in Gaza to check vehicles going to the event, residents said.
 
Their security forces also deployed across Gaza City and fired in the air on Monday morning at one intersection after youths threw stones at them, witnesses said.
 
Odeh said that she had spoken to people who had walked to the rally from Beit Hanoun, which lies at the northernmost tip of the Gaza Strip.
 
"Four months after the Hamas takeover of Gaza, the occasion of the anniversary of Yasser Arafat's passing has basically brought all Fatah members together to show that they are here," she said.
 
She said that the rally had galvanised Fatah supporters after previous attempts to hold public demonstrations in the Gaza Strip were put down by the Executive Force, Hamas's self-styled police.
 
Fatah, a secular party, has had only a marginal presence in Gaza since Hamas forces violently took control of the region in June and took over key institutions.
 
Pictures confiscated
 
The Wafa news agency, which is run by the office of Abbas, said Hamas had confiscated pictures of Arafat and headdresses symbolising the late leader.
 
The Executive Force arrested several people on Sunday and on Monday confiscated tens of thousands of portraits of Arafat and Abbas.
 
The items were seized "at a time when the Gaza Strip is being deprived of basic goods and medicine", a Hamas security official was quoted as saying by a pro-Hamas website.
 
Israel recently imposed caps on fuel imports to the Gaza Strip, leading to transport restrictions and reductions in electricity output to the Palestinian territory.
 
Thousands of Palestinians turned out for the Fatah-organised rally, which was the largest
one to commemorate the death of former Palestinian leader Yasser Arafat [AFP]

Source: Al Jazeera and agencies