At least 13 people have died in Gaza after some of the worst fighting for months broke out between rival Palestinian factions Hamas and Fatah.
The clashes came as Hamas marked a year since taking office
Two civilians, one a two-year-old boy, were among those killed, according to Palestinian medical sources.
The clashes erupted after weeks of relative calm and renewed efforts to form a national unity government.
Hamas and Fatah said they were suspending talks after the violence, which was continuing early on Saturday.
Reports from Gaza City say Hamas and Fatah gunmen have been exchanging mortar fire and grenade attacks outside a security compound.
More than 40 people have died as a result of a power struggle between supporters of the Hamas-led government and Palestinian Authority President Mahmoud Abbas' Fatah faction since mid-December.
Echo of gunfire
The BBC's Alan Johnston in Gaza says there has been intensive mediation by Egyptian diplomats in an effort to stop the bloodshed there.
He says late on Friday evening word came that Fatah and Hamas had agreed to order their supporters off the streets.
But our correspondent says both then accused the other of reneging on the deal and clashes continued.
Some of the heaviest fighting took place in the Jabaliya refugee camp, where Hamas gunmen laid siege to the home of a local Fatah leader.
The gunmen eventually stormed the building and two people were killed.
Militants linked to Fatah said they had captured at least 19 Hamas supporters in response to the siege. Some were later freed.
As night fell the streets of Gaza continued to echo to the sound of gunfire and explosions.
Elsewhere, fighting erupted outside the residences of Mr Abbas and Hamas Foreign Minister Mahmoud Zahar.
Mr Zahar's home was damaged after being hit by a rocket-propelled grenade, security sources said.
Fatah said it was calling off national unity talks in response to the violence.
"How can the dialogue go on when there is a bomb underneath the table?" Reuters news agency quoted Fatah spokesman Tawfiq Abu Khoussa as saying.
But Hamas laid the blame at Fatah's door.
"The Fatah movement continues to give a factional, political and media cover to the killers. Hamas has therefore decided to suspend all talks with Fatah," spokesman Fawzi Barhoum said.
The violence began when two Hamas members died in what the group said was a roadside bomb attack on a convoy by Fatah militants.
The clashes came as Hamas supporters gathered to mark a year since the party defeated Fatah in Palestinian elections.