Seven people, including one civilian, have been killed in the volatile territory since the latest bout of fighting erupted on Thursday.

Egyptian mediators, who for months had been trying to calm tensions between the two sides, on Monday once again persuaded the rivals to agree to a new truce, but shots were heard after it was due to take effect.

Numerous previous ceasefires had been violated within hours of taking effect since the first major bout of factional violence erupted in December. Since then, more than 160 people have been killed.

Palestinian president Mahmud Abbas called for an end to the bloodshed after warning last week that the strife had left Palestinians on the brink of a civil war and was as damaging, if not more so, than the 40-year Israeli occupation.

"What's happening in Gaza is regrettable and very harming. Both parties are working seriously with the Egyptian brothers to put an end to it," Abbas told reporters in Ramallah in the occupied West Bank.

The factional fighting in one of the world's most densely populated areas, along with renewed Israeli attacks in response to militant rockets, have threatened to sink international efforts to jumpstart the dormant Middle East peace process.

The violence has rattled the unity government that the two parties formed in March with the hope that the cabinet would put an end to the bloodshed and pave the way for an end to a crippling Western aid boycott.

The level of animosity between the rivals locked in a bitter power struggle has reached new highs after more than a year of steadily rising tensions that followed Hamas's rout of Abbas's long-dominant Fatah in a parliamentary poll in January 2006.