A Palestinian youth flashes the V sign over thousands of Palestinian Fatah supporters as they gather Monday at a rally marking the third anniversary of the death of the late leader Yasser Arafat in Gaza City, Gaza Strip. Later, Hamas security forces opened fire at the rally, violently dispersing the largest public display of support for the rival Fatah movement since Hamas seized control of the Gaza Strip in June. Seven people were killed and dozens were wounded, medical officials and Fatah said.

Gaza City, Gaza Strip ? A rally of more than 250,000 Fatah supporters ended in mayhem Monday, with Hamas police opening fire and protesters hurling rocks or running for cover. Seven civilians were killed and dozens were wounded in the violence between Palestinian factions.

The demonstration in a Gaza City square, marking the Nov. 11, 2004 death of iconic Palestinian leader Yasser Arafat, posed the strongest challenge to Hamas rule in Gaza since the Islamic militant group seized the impoverished territory by force in June. The images of Hamas policemen facing off against large groups of rock-throwers challenged Hamas’ claim that it has established tight control.

Fatah’s unexpected show of strength was also its most persuasive argument that its leader, moderate Palestinian President Mahmoud Abbas, has a mandate to renew peacemaking with Israel at a U.S.-hosted Mideast conference in Maryland later this month.

The march started out peacefully after Palestinians in buses, on foot and on donkey carts streamed into a large sandy lot by the Mediterranean. Waving yellow Fatah flags, the crowd cheered and whistled as the movement’s remaining leaders in Gaza – most had fled to the West Bank in June – delivered hopeful speeches about a comeback.

But the rally quickly descended into chaos and bursts of gunfire as the crowd was beginning to leave. Fatah stone-throwers clashed with armed Hamas policemen.

“It was a big mess, and everyone was running for cover,” said a wounded 24-year-old demonstrator who would give only his first name, Farouk, for fear of repercussions by Hamas. While he lay on the ground waiting for help, he said he saw a man in a wheelchair trying to hide near a wall.

In one confrontation, an Associated Press reporter observed about 30 Hamas policemen – some posted on the rooftop of a government ministry, others on the streets below – firing heavily for about 10 minutes. Some appeared to be shooting over the heads of Fatah stone-throwers while others were firing randomly.

In another, AP Television News footage showed hundreds of young Fatah activists, some wrapped in yellow flags, facing off against Hamas police in black or blue-camouflage uniforms across an intersection.

The Fatah supporters pelted Hamas troops with stones, surging forward even as they were met by heavy bursts of gunfire. One Hamas policeman dropped to one knee for better aim. At one point, a young stone-thrower collapsed and was carried off by others.

Elsewhere, AP photographers observed frantic demonstrators commandeering private cars to take the wounded to hospitals. Medical officials said seven civilians were killed and 85 people were wounded.

Hamas spokesman Sami Abu Zuhri held Fatah responsible for the violence, saying Fatah gunmen had been posted on high-rise buildings overlooking the rally to shoot at Hamas police officers as a planned provocation.

Hamas said five of its policemen were wounded by sniper fire from the roof of the pro-Fatah Al Azhar University near the rally.

“If Hamas was planning today’s incidents, why would we have allowed the rally to take place?” Abu Zuhri told a news conference.

Fatah denied the charge, saying no armed men were allowed at the rally. An AP reporter saw 10 Fatah gunmen being turned away at the start of the rally. Medical officials said none of the dead was a Hamas policeman.

After nightfall, Hamas forces arrested 27 Fatah activists involved in planning the rally, Fatah officials said. They also confiscated computers and documents from a Fatah media office.

Tens of thousands of Fatah supporters still draw a monthly salary from Abbas’ West Bank government, ensuring loyalty under Hamas rule.

Fatah claimed 500,000 people attended the rally. An AP reporter at the scene estimated half that.