Gunmen shot dead a Hamas commander in the Gaza Strip on Tuesday and the Islamist group blamed a Fatah-dominated security service for the first killing in the territory since a ceasefire went into effect overnight.
Hospital officials in the southern town of Khan Younis said Hussein Shabasi was shot in the head.
A spokesman for Hamas’ armed wing said he was killed by the Preventive Security Service, most of whose members belong to President Mahmoud Abbas’ Fatah faction. The security service denied any connection with his death.
The ceasefire had appeared to be holding, bringing people out of their homes for the first time in five days as shops reopened and traffic again clogged Gaza's narrow streets.
The truce took effect after Prime Minister Ismail Haniyeh of Hamas met an aide to Abbas on Monday in a bid to stem a surge of fighting in which at least 30 Palestinians were killed.
The internal violence that began on Thursday was the fiercest since Islamist Hamas, which rejects peace talks with Israel, trounced the more moderate Fatah in an election last year, triggering a Western aid embargo.
"We are very happy and we hope that this time, the ceasefire will last," said Yahya Zaki, a clothing store owner.
Some gunmen remained on the streets in the Gaza Strip and police deployment was limited.
Peretz: The initiative will be ours
The bloodshed has derailed unity government talks between Hamas and Fatah and prompted some Gazan families to flee their homes.
"I hope that calm and stability will last so that we can resume dialogue over formation of a national unity government," Haniyeh said after the truce began.
Previous ceasefires, including one last month, have been short-lived.
Shops and schools were shut down over the past five days as the sounds of gun battles echoed across the narrow, densely populated territory where 1.5 million Palestinians live.
While gunmen from both factions removed their impromptu checkpoints, some Fatah fighters remained visible in Gaza City, protecting the official residences of Abbas and a senior faction chief as well as the compound of a security service considered loyal to Fatah.
The ceasefire also requires Hamas and Fatah gunmen to release hostages and Palestinian police to deploy in force.
Samih al-Madhoun, a senior leader of Fatah's al-Aqsa Martyrs Brigades, said the group had given Hamas a list of Hamas members it is holding and expected a reciprocal roster from the Islamist group so that an exchange could be negotiated.
A day after a suicide bomber from Gaza killed three people in Israel's Red Sea resort of Eilat, Israeli Defense Minister Amir Peretz vowed to take action but gave no hint as to when, where or against whom the military would strike.
"The initiative will be ours and we have no intention of relaying what we plan to do," Peretz said in broadcast remarks during a visit to the border with Egypt, near Eilat.
With the Quartet of Middle East peace mediators due to meet in Washington on Friday, Israel could be wary of taking military action that might jeopardize a diplomatic drive promoted by its main ally, the United States.
In remarks on Monday after the Eilat attack, Peretz said Israel would "do everything to preserve" its two-month-old Gaza ceasefire with militant groups. The suicide bombing, claimed by Islamic Jihad and al-Aqsa Martyrs Brigades, was the first in Israel in nine months.