Fatah said Hamas's so-called Executive Force fired a rocket-propelled grenade at the northern Gaza home of a senior al-Aqsa Martyrs Brigades commander, killing one of the group's members. Four gunmen were wounded in the battle but not the al-Aqsa commander, Fatah said.
Fatah spokesman Abdel Hakim Awad said Hamas had planned the attack in advance and warned of "grave consequences" if the Islamists mounted any more.
A spokesman for Hamas's armed wing, Abu Ubaida, said Hamas gunmen had only responded to shooting from the al-Aqsa commander's house. He said a Fatah fighter was preparing to fire a rocket-propelled grenade when it exploded in his hands, killing him and wounding the others. It was the first deadly clash since Abbas's secular Fatah faction and Hamas formed a unity cabinet on Saturday.
The unity deal has eased a Western diplomatic embargo of the Palestinian government but a year-old ban on direct aid remains in place.
EU MIDEAST ENVOY MEETS:
But EU Middle East envoy Marc Otte met Finance Minister Salam Fayyad in the West Bank city of Ramallah on Wednesday, a day after talks in Gaza with Foreign Minister Ziad Abu Amr, European and Palestinian officials said.
"The minister of finance has a difficult task before him and I want to offer him encouragement," UN envoy Alvaro de Soto said as he arrived for separate talks with Fayyad on Wednesday.
The contacts followed a meeting on Tuesday between a senior US diplomat and Fayyad, a Western-backed independent.
The meetings marked a move back to at least some engagement between the government and the Quartet of Middle East mediators - the United States, European Union, United Nations and Russia.
In Berlin, a spokesman for Chancellor Angela Merkel said she will travel to Israel and the Palestinian territories at the end of March to assess the new Palestinian administration.
Germany is the current EU president. Merkel, who will also visit Jordan and Lebanon, will meet Olmert and Abbas, Wilhelm said, adding he did not expect that she would hold talks with Palestinian cabinet members.
Despite the direct aid embargo, the United Nations says about $1.2 billion in foreign aid reached the Palestinians last year, up from an estimated $1 billion in 2005.
The EU, the United States and other donors increased the flow of humanitarian assistance using channels outside the government, in keeping with the boycott on direct aid.