Palestinian Authority Chairman Mahmoud Abbas condemned as an "ugly and inhuman crime" the killing of three young children of a senior PA intelligence official in a car outside their school in Gaza City Monday morning.

The driver of the vehicle, 25, was also killed in the drive-by shooting, in which Palestinian gunmen opened fire in a street crowded with hundreds of school children. It was an unprecedented attack that could ignite widespread factional fighting.

There was no immediate claim of responsibility.

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In the attack, the gunmen pumped dozens of bullets into a car carrying the children of intelligence officer Baha Balousheh, a loyalist of Palestinian Authority Chairman Mahmoud Abbas' Fatah movement.

A decade ago, Balousheh was a lead interrogator in a crackdown on the now-ruling Islamic militant Hamas movement. Unknown gunmen tried to kill Balousha when they ambushed his car in Gaza in September, one of several attacks on top intelligence officials loyal to Abbas in the strip this year.

The children were aged six, seven, and eight.

"This was an ugly and inhuman crime, carried out by a gang of miscreants," Abbas said. "We strongly condemn it."

Four more people were wounded in the attack in Palestine Street, lined with nine schools. Baha Balousheh was not in the area.

The car was riddled with at least 30 bullets. Its seats, school bags and a small plastic bag with a sandwich in it were spattered with blood.

"Masked gunmen took off in a yellow car after they fired many bullets at the car. Children were screaming and weeping in fear," said one primary school boy who witnessed the assault.

A senior Palestinian official said it was unclear who was behind the attack. Besides internal political unrest, Gaza is also riven with clan fighting and a surge in criminal violence following a Western aid embargo on the Hamas government that has deepened poverty.

"The killers knew Baha was not in the car because he never drove his children to school. They couldn't get to him to kill him, so they killed his children instead," the official said.

Children search for parents
Dozens of Fatah supporters tried to close the school street, shouting: "God help us take revenge against the killers."

During the attack, children dropped to the ground or fled, screaming.

"I was walking with my young brother, Wael, who is 9, and we just crossed the street in order to take him to the school when shooting took place," said 12-year-old Fadwa Nabulsi, still shaken by the bloody scene.

"We saw fire coming from one car. We started screaming and children started running. I was crying, and I lost Wael for about half an hour. Then I found him hiding in a felafel shop. I'm trying to find my father to take us back home," she said.

Dozens of Palestinian police in the area were trying to calm the children and help them locate their parents. Hundreds of anxious parents rushed to Gaza City's Shifa Hospital to get word on their children.

Gaza has been plagued by factional violence in the past, with dozens killed and hundreds wounded. However, Monday's attack targeting children was unprecedented, and was likely to trigger widespread confrontations at a time when the lines between Hamas and Fatah have hardened.

Earlier this month, Abbas announced that talks on forming a unity government between Hamas and Fatah have broken down. Earlier this week, he raised the possibility of calling early elections, drawing angry protests by Hamas which said he does not have the authority to dissolve the Hamas-dominated parliament.