Israel's assassination of Hamas spiritual leader Sheikh Ahmed Yassin threatens to unleash Palestinian revenge attacks today.
Hamas vowed to strike back with unprecedented ferocity after the wheelchair-bound cleric was killed yesterday in a missile strike outside a Gaza City mosque.
"The battle is open and war between us and them is open," said senior Hamas political leader Abdel-Aziz al-Rantissi.
The al-Aqsa Martyrs Brigades, part of Palestinian President Yasser Arafat's Fatah faction and also behind suicide bombings, called for "war, war, war on the sons of Zion. . . . There will be a response within hours, God willing."
US President George W. Bush's administration said it was "deeply troubled" by the situation and appealed for regional calm, but unlike many other countries around the world declined to condemn the assassination.
The Bush administration said Israel had the right to defend itself against a "terrorist" group.
An Islamist Internet site published a statement purporting to come from an al-Qaeda-linked group, the Abu Hafs al-Masri Brigade, vowing revenge on the United States and its allies for the killing of Hamas's founder and spiritual leader.
In the United States, stocks and the dollar plunged as news of Yassin's assassination contributed to investors' fears about global security.
Israeli Prime Minister Ariel Sharon, said to have personally ordered the helicopter attack on the paralysed 67-year-old Yassin, hailed the operation as a strike against "the first and foremost leader of the Palestinian terrorist murderers."
But some Israelis, including a member of Mr Sharon's cabinet; Arab leaders; and many Middle East political analysts said Yassin's death would only incite militants to more violence.
The European Union and UN Secretary General Kofi Annan denounced the attack on Yassin.
Protests erupted in the West Bank and Gaza and Israeli forces killed four Palestinians, including an 11-year-old. About 200,000 mourners marched in Yassin's funeral procession, the largest gathering in Gaza in recent memory.
"Sharon, start preparing your body bags because [Hamas's] Qassam Brigades will put Israeli houses in mourning," the crowd chanted.
Israeli security forces are on high alert nationwide. Israeli news media said there was also concern about the risk to Israeli and Jewish targets abroad.