Fighting between Hamas and Fatah claimed at least 31 lives today futhering the rift within the Palestinian unity government but as night fell early signs of a truce emerged.
A Palestinian Hamas militant takes position before storming the headquarters for security forces loyal to President Mahmoud Abbas in the southern Gaza strip today.
Fatah forces loyal to the moderate President Mahmoud Abbas were losing control of northern Gaza to Islamist Hamas fighters loyal to Prime Minister Ismail Haniyeh.
A Hamas spokesman tonight offered a conditional ceasefire under which the interior minister, a post now held by Mr Haniyeh would command all of the Palestinian security services.
"[Egyptian mediators] received the proposal and promised to present it to Abbas. The ball is now in [his] court. Hamas does not set impossible conditions, and if there are serious intentions to resolve the crisis, we will be ready to reciprocate," said Sami Abu Zuhri.
Mr Abbas and Mr Haniyeh later agreed in a telephone call on the need to end the bloodshed, both factions confirmed.
In the biggest single loss of life today, some 13 people were reported killed in a grenade and mortar attack at the Preventive Security building in the town of Khan Younis.
Local residents reported people trapped in the rubble. Hospital officials said two bodies were brought in shortly after the explosion. Hamas had no immediate comment.
Many of Gaza's beleaguered 1.5 million inhabitants called the conflict a civil war and
President Abbas described the conflict as "madness".
A protest of around 1,000 was fired upon with four injuries and two deaths as they marched through Gaza City chanting "stop the killing". One of those killed was a teenager. It was not immediately clear who was responsible.
At least 78 people have been killed since the bloodshed began on Saturday, according to hospital officials.
It is estimated 80 people were wounded today as gun battles also erupted in Gaza City where Hamas gunmen killed six Fatah men in one clash.
Two Palestinian employees of the United Nations Relief and Works Agency (UNRWA ) were killed in separate incidents, leading the agency to temporarily suspend most of its operations.
It also emerged tonight that a schoolboy was shot leaving an exam room.
While the unity government has not collapsed, Fatah today said it was suspending participation until a ceasefire was agreed.
Had Mr Abbas's group stopped withdrawn it is likely Mr Haniteh would have assumed the power to rule by decree and widen the divide between Gaza the West Bank, where Fatah is dominant.
Israeli Foreign Minister Tzipi Livni, speaking in Jerusalem, said Hamas control of Gaza would raise questions about whether Israel could ever reach an agreement over an end to the broader conflict.
The European Union foreign policy chief Javier Solana said the EU would consider participation in an international force in Gaza, though a decision would be still a long way off.
Israeli Prime Minister Ehud Olmert said for the first time yesterday that an international force along the Gaza -Egypt border should be seriously considered to help counter the growing strengthen of the militant Hamas.
"If we are asked, of course we will consider that possibility," Javier Solana told reporters in Brussels.
"Now we are far from a decision .. It's open and we will see how things evolve and what is the decision taken by the important players which are ... the Israelis, the Palestinians and the Egyptians."
France, meanwhile, called for the EU to resume its direct financial aid to the Palestinians, arguing that the cash would bring stability as rival factions clashed in Gaza.
Western donors led by the United States cut off direct financial aid to the Palestinian Authority in March 2006 after the Hamas defeated Fatah in parliamentary elections.
The move was widely criticised by rights and relief groups which pointed out that Israel was withholding tax revenues it collects on the Palestinians' behalf, because Hamas refused to recognise Israel's right to exist.