Hamas militants have hailed a series of military victories over rivals Fatah in the Gaza Strip as a new "liberation" of the territory.
Hamas has taken control of almost all the Gaza Strip
Fighters seized Fatah's Preventative Security building in Gaza City and the intelligence service headquarters, and overran the town of Rafah.
A least 20 Palestinians died as the latest battles raged throughout Gaza.
An aide to Palestinian leader Mahmoud Abbas said Mr Abbas plans to dismiss the government and call elections.
Nabil Abu Rudeineh said the Hamas offensive was "illegal" and a coup against the Palestinian Authority.
"This is part of the job of the president, he has full power according to the law to dismiss the government," he told the BBC.
Gaza has been the focal point for a violent and bitter power struggle between Hamas and Fatah since Hamas won a surprise election victory in early 2006.
Hamas, an Islamic organisation, rose to prominence in Gaza during two Palestinian uprisings, and refuses to recognise or negotiate with Israel.
Fatah, a secular political grouping headed by Mr Abbas, ran the Palestinian Authority until 2006 and officially recognises the Jewish state.
The two groups are nominally working together in a three-month-old government of national unity.
In Thursday's fighting, Hamas targeted four key security and intelligence compounds in and around Gaza City.
There were scenes of looting and celebration from Hamas militants as they seized control of the Preventative Security and Gaza's intelligence headquarters.
Several reports accused Hamas of shooting dead defeated Fatah fighters in front of the building.
"They are executing them one by one," one witness told the Associated Press news agency.
A Hamas TV station showed pictures of militants tramping triumphantly through the ransacked HQ, reviled by Hamas as a symbol of Fatah's violent offensives against the Islamic group during the 1990s.
Earlier, there were reports that the two sides were negotiating a truce, after Hamas issues a series of demands to Fatah.
The conditions included the appointment of an interior minister responsible for all Palestinian security forces, and shared control of Gaza's boundaries and borders.
No agreement was reached, though, and more violence ensued.
A Hamas spokesman, Sami Abu Zuhri, said the capture of the security compound was "the second liberation of the Gaza Strip", describing the first as the Israeli withdrawal of troops and settlers in 2005.
"We are telling our people that the past era has ended and will not return," another spokesman told AP.
"The era of justice and Islamic rule have arrived."
Thursday's fighting came despite calls from around the world for an end to the fighting.
The international community has called for a ceasefire, and Arab League head Amr Moussa said the fighting was destroying the Palestinian cause.
The EU and US have voiced international concern. with the EU suspending aid operations in Gaza in response to "suicidal" violence.
Meanwhile, there were also reports that at least four young Palestinians were killed by an explosion in Rafah.
However, Israel denied its forces had fired in the area.
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