GAZA - At least 17 Palestinians were killed yesterday as President Mahmoud Abbas's Fatah faction and Hamas battled for control of Gaza and Israel launched a deadly round of air strikes against the Islamists.

Palestinian officials said the widening hostilities could bring down a two-month-old unity government formed between Hamas and secular Fatah. Some Palestinians see this leading to all-out civil war and the end of the Palestinian Authority.

Terrified Gaza residents hid indoors as masked gunmen fought running battles street-tostreet. In one panicked call to a radio station, a woman urged Palestinian leaders to act, pleading: "Do not leave us to die here."

Israel's biggest air strike razed a building used by Hamas's Executive Force in the south Gaza town of Rafah, killing four Hamas men. Israel said the attack was not connected to internal clashes that have killed at least 40 people since Friday.

A later air strike in northern Gaza killed another Hamas loyalist and wounded two other Palestinians, residents said.

While battles raged throughout the Gaza Strip, Hamas fighters have fired rockets at southern Israel, causing injuries but no deaths, in an apparent attempt to draw Israel into the fighting.

Israel said the air strikes, the deadliest since a November truce in Gaza was declared, targeted a Rafah command centre used by Hamas to plan attacks and a rocket crew that had just fired into the Jewish state.

The Executive Force, which has taken a lead in fighting with Fatah, denied the Rafah building was used to plan rocket attacks and said the air strikes proved Israel was taking sides.

Foreign Minister Tzipi Livni said Israel may step up military strikes in the Gaza Strip in response to a surge of Palestinian cross-border rocket salvoes.

"Until now, we have demonstrated restraint, but this situation is not a tolerable situation," Ms. Livni told reporters after security consultations with Prime Minister Ehud Olmert and Defence Minister Amir Peretz.

Israel faces a delicate balancing act. It is under heavy domestic pressure to stop the rockets and also wants Fatah to deal a blow to Hamas; it agreed to let 450 Fatah troops into Gaza from Egypt on Tuesday. But overt Israeli assistance for Fatah could backfire if Hamas is able to paint Mr. Abbas as an ally of the Jewish state, which many Palestinians see as their real enemy.

"We will not intervene in the war itself, but if Abbas will request specific help, we will supply [it]," Shimon Peres, Israel's deputy prime minister, told reporters during a visit to Estonia.

Hamas and Fatah declared a ceasefire late in the afternoon. But fierce gunfire and explosions were still heard throughout the cramped coastal strip. Gunmen opened fire on the home of Ismail Haniyeh, the Palestinian Prime Minister, though no one was injured. Two Fatah security officers and a Hamas gunman were killed in separate clashes.

Earlier, Hamas gunmen stormed the home of Mr. Abbas's top security chief, Rashid Abu Shbak, fired mortars at Mr. Abbas's compound and set fire to a building where the head of a pro- Fatah security service lives.

At least 50 journalists were trapped in Gaza's main media centre. They said the building was surrounded by gunmen and some people inside had been injured.

Some Western officials say the government's collapse could allow Mr. Abbas to assert more control, leading to an end to a Western aid embargo ahead of possible early elections.

A Palestinian official said Mr. Abbas cancelled a trip to Jordan and planned to travel to Gaza today to try to restore calm. Several Fatah leaders have urged him to declare a state of emergency to allow him to rule by decree for a limited period.

In yesterday's deadliest single attack, five detained Hamas gunmen and two Fatah escorts were killed when their vehicle, travelling to a detention centre, came under fire.