Rival Palestinian factions clashed in the Gaza Strip today, killing 12 people and wounding 20 in a wave of bombing and shootings.
The death toll is the highest in internal Palestinian violence in a single surge of violence since Hamas's rise to power exactly a year ago.
Al Aqsa Martyrs Brigades said it seized the Hamas supporters in Gaza and the West Bank and threatened a "severe response" if Hamas gunmen hurt a senior Fatah militant besieged in Gaza.
A Fatah-linked militant group said it had captured 24 Hamas hostages.
The mounting violence forced the postponement of talks today to form a coalition government which could ease a US-led boycott imposed after Hamas won elections last January.
"The entire dialogue could explode," Fatah spokesman Tawfiq Abu Khoussa said, blaming Hamas for the violence. The talks were put off to Sunday.
Eight Hamas supporters, including a local leader, a militant from Al Aqsa Martyrs Brigades, another whose identity or allegiance was unclear and two bystanders were killed in violence which began last night.
Hamas vowed revenge for the killing of their members and of the leader named Zuhair al-Mansi which a spokesman described as a "grave crime". He said there would be no mercy for the killers.
"There can be no dialogue with the killers. We will not stand handcuffed and there will be no mercy," Hamas spokesman Fawzi Barhoum said.
The fighting coincided with a rally by thousands of Hamas supporters to mark the first anniversary of the Islamist group's election victory over the once-dominant Fatah last year.
In Jabalya in the northern Gaza Strip, Hamas gunmen besieged and later stormed the house of senior Fatah militant Mansour Shalayel, who they accused of shooting a Hamas supporter earlier.
In the West Bank city of Nablus, Al Aqsa Martyrs Brigades paraded a group of youths it had captured and threatened tough reprisals if Shalayel was hurt. But a Hamas security source said the group's gunmen would not withdraw.
In the West Bank town of Tulkarm unknown gunmen shot and critically wounded a Hamas official as he left evening prayers.
Around 40 Palestinians have been killed in fighting between rival groups since President Mahmoud Abbas of Fatah called last month for presidential and parliamentary elections after a previous round of unity talks broke down.
Hamas has said any snap poll would amount to a coup. But it has struggled to govern since taking office in March under the weight of sanctions imposed because of its refusal to recognise Israel, renounce violence and abide by interim peace deals.