Palestinian leader Yasser Arafat is facing the most serious internal threat to his authority in a decade, as militants are turning guns against their own government and long-festering political tensions are erupting into gunfights and kidnappings in the streets of the Gaza Strip, according to Palestinian officials, militant leaders and analysts.

The internecine violence has exposed deep fissures in Arafat's Fatah political movement, the dominant faction in the 10-year-old Palestinian Authority, and has escalated demands across Palestinian society that Arafat surrender some of his powers and reform a governmental system riddled with corruption.

Isolated for more than two years in his presidential compound in the West Bank city of Ramallah, Arafat has exercised diminishing control over his party and his supporters in Gaza. The events unfolding in this crowded, impoverished enclave suggest that Fatah is engulfed in full-scale fratricide. Feuding Fatah political leaders have created their own militias, the movement's armed wing has turned against its creators, and reform efforts have become entangled in the power struggles.

"It's a catastrophe," said Ahmed Helis, general secretary of Fatah in the Gaza Strip. "The truth is that both sides are corrupt. There's not a good side and a bad side. And Fatah hasn't accepted what's really happening."

"It's very serious, much more serious than any time before -- since the beginning of the Palestinian Authority, since the formation of the PLO [Palestine Liberation Organization] in 1964," said Mustafa Barghouti, a Palestinian physician, political analyst and reform advocate. "The whole society is now upset and wants reform."

Some Palestinian officials argue, however, that calls for reform are being used as camouflage by individuals and organizations attempting to seize power in Gaza.

"I don't want anybody to believe what is happening in the streets of Gaza has anything to do with reform," said Marwan Kanafani, a Palestinian legislator. "It's a simple power struggle. It's hurting us, and it's going to get worse. People are disgusted and panicked and afraid."

The crisis has been spurred largely by competition among Palestinian factions to stake claims on power in an eventual Palestinian-controlled Gaza, according to Palestinian officials and militants. After four years of crushing conflict between Israelis and Palestinians, Israeli Prime Minister Ariel Sharon has proposed withdrawing Jewish settlers and Israeli soldiers from the enclave within the next few years.

The tensions came to a head during four days of chaos that began Friday, when the Palestinian Authority's top police official in Gaza was kidnapped by militants from the Popular Resistance Committees, a loose-knit group of disaffected members of larger Palestinian militant organizations, including the al-Aqsa Martyrs Brigades, an armed wing of Fatah. The gunmen paraded Ghazi Jabali, the senior security chief in Gaza, through the streets of a refugee camp, accusing him of stealing $22 million in public funds.

When Arafat then replaced Jabali with his cousin, Moussa Arafat, crowds of Palestinians attacked the authority's military intelligence headquarters in the southern Gaza town of Khan Younis, and later about a dozen people were wounded in a battle between al-Aqsa gunmen and uniformed Palestinian security forces in the border city of Rafah. Competing militant groups demonstrated in the streets of Gaza City on Monday, some protesting government corruption, others supporting the officials accused of being corrupt.

Prime Minister Ahmed Qureia submitted his resignation on Saturday, complaining that his government could not contain the turmoil in Gaza, but Arafat refused to accept it. On Wednesday, the Palestinian Legislative Council approved a resolution urging Arafat to accept the resignation of Qureia and his cabinet because of their failure to control the "tragic and dangerous" situation.

Later Wednesday, Arafat approved a reform initiative that would merge the Palestinian Authority's roughly one dozen security branches into three agencies, according to Palestinian officials quoted by the Reuters news agency in Ramallah. Palestinian reformers and foreign governments had urged Arafat to take such a step for more than a year, but it was not clear what practical effect it would have if implemented.

The spectacle of Palestinian militants in pitched gunfights with Palestinian government forces has alarmed many people here, even those who have repeatedly expressed dismay over police abandoning their posts in the face of Israeli tanks or doing little to combat common crime.

"I don't want to watch our own people fighting each other," said Ibriham Shaban, 52, who owns a shoe shop in downtown Gaza City. "Fights between brothers are much more dangerous than fights with the Israelis."

Abu Mohammad, a spokesman for the al-Aqsa Martyrs Brigades who would not be quoted by his full name because he said he is wanted by the Israelis, acknowledged that his group is troubled by taking up arms against the organization that created it. But he said the militants, who recently issued a 10-page manifesto calling for reform in the Palestinian Authority and urging Arafat to relinquish some of his powers, are frustrated by Arafat's failure to address their concerns.

"We don't want to trade the corruption of the Israeli occupation for the corruption of Palestinians when they pull out of here," Abu Mohammad said as his bodyguards patrolled the street nearby.

Many Gaza officials said they believe that Mohammed Dahlan, the former Palestinian security chief in Gaza and a longtime Arafat rival, was behind the kidnapping of Jabali on Friday. While Dahlan has strong support among some Fatah factions and security forces in Gaza, he also has been tainted by rumors that he used his government position to amass personal wealth. Dahlan declined requests for an interview.

But Ziad Abu Amr, an independent legislator and advocate of government reform, said: "This is not a personal problem. It's a lack of change, a lack of reform. Superficial measures here and there are not adequate."

Underscoring the continuing violence, Nabil Amr, an outspoken critic of Arafat, was shot in the foot several times by gunmen near his home in Ramallah Tuesday night, according to Palestinian officials. Amr, a lawmaker and former Palestinian information minister, was taken by ambulance to Jordan for surgery Wednesday. He issued a statement saying he would not be silenced by the attack.

Correspondent John Ward Anderson in Jerusalem and special correspondent Sufian Taha in Ramallah contributed to this report.

Palestinians demanding reforms throw stones and set fires at a Palestinian Authority police post in a Gaza Strip refugee camp. Gunmen fire at Palestinian police offices in the Rafah refugee camp in Gaza, where feuding political leaders have created their own militias.Palestinians carry a youth wounded during clashes between militants of the al-Aqsa Martyrs Brigades and Palestinian police as pressure mounts against Palestinian leader Yasser Arafat.