(Updates death toll, adds arrests paragraph 8)
By Nidal al-Mughrabi
GAZA, Nov 12 Gunfire killed at least seven people and wounded 80 on Monday at a Fatah memorial rally for Yasser Arafat attended by more than 200,000 supporters of the defeated faction in the Hamas-ruled Gaza Strip.
A sea of yellow Fatah flags had filled a Gaza square for the biggest gathering held by Palestinian President Mahmoud Abbas's secular faction in the territory since Hamas Islamists routed its fighters there in June.
The rare Fatah rally broke up in chaos after gunfire rang out and grew into what Hamas described as battles with the rival group's fighters, forcing even members of the crowd who had initially stood their ground to bolt for cover.
Dr Muawiyah Hassanein, head of Gaza's emergency medical services, said seven people, all civilians, were killed. He said 80 people, including several Hamas security men, were wounded.
Fatah officials accused Hamas forces of opening fire from the nearby Islamic University. Hamas said its men had come under attack from Fatah gunmen and returned fire.
The emotional memorial event for Arafat had given Fatah a rare chance to assemble its supporters in the Gaza Strip.
Abbas, preparing for a U.S.-hosted conference with Israel later this month on Palestinian statehood, has rejected new dialogue with Hamas until the group relinquishes control of the Gaza Strip.
Later, a Fatah official said Hamas security forces had arrested several of its activists, including Mohammad al-Nahal, a senior Fatah political leader in north Gaza.
Hamas has banned opposition rallies since its takeover of the territory but any move to prevent a remembrance ceremony for Arafat, the iconic leader who died on Nov. 11, 2004, would have been widely unpopular among Palestinians.
"The people came out today into the streets to say 'no' to Hamas," said senior Fatah official Mohammed Dahlan, a former security chief in the Gaza Strip who is now based in the occupied West Bank, where his faction holds sway.
"I call on Fatah in Gaza to continue pursuing peaceful means in confronting Hamas ... Popular means are the only way to bring the downfall of this fascist movement," he said.
Ahmed Qurie, chief Palestinian negotiator in talks with Israel, compared Hamas's rule in Gaza to the Israeli occupation.
"The policy of silencing the other side will not win," he said at a ceremony in Ramallah.
Hamas official Sami Abu Zuhri told a news conference Fatah was to blame for the day's "deaths and crimes" in Gaza.
Huge murals of Arafat in his trademark Arab headdress, and a smaller picture of Abbas, had provided a backdrop for the event which organisers said was attended by more than 250,000 people. A Reuters witness said between 200,000 and 250,000 attended the rally.
Fatah nationalist songs blared from loudspeakers as many in the crowd expressed their longing for the days of Arafat, regarded by Palestinians as a symbol of unity.
"Abu Mazen (Abbas) is not like Arafat but he is our president now and we respect him. We urge him to end Hamas occupation," said a teenage participant, who gave his name only as Khaled. (Writing by Jeffrey Heller in Jerusalem; Editing by Andrew Dobbie)