Capping a weekend of crisis and chaos in the Palestinian Authority, dozens of Palestinian gunmen stormed an office of the Palestinian intelligence service early Sunday, opening fire on security guards inside, smashing furniture and burning down the one-story building, witnesses said.

The attack by the gunmen - who belong to an extreme offshoot of Yasser Arafat's Fatah movement - was the latest round of violence in the Gaza Strip during a weekend of kidnappings, demonstrations and protests against reforms in the Palestinian Authority security forces.

The strike at the headquarters building, which caused Arafat's men to flee the structure after a gun battle with the attackers, followed protests by thousands of Palestinians who took to the streets in Gaza City Saturday night. The protesters, many of them armed, chanted and carried banners against the reforms of the security organizations decreed by PA Chairman Arafat earlier Saturday, notably the nomination of Arafat's nephew Musa as head of the Palestinian security forces.

The uncertainty and unrest came as PA Prime Minister Ahmed Qureia submitted his resignation on Saturday, a step which Yasser Arafat refused to accept. Israel Army Radio, quoting associates of Qureia, said Sunday that Qureia did not intend to rescind his resignation.

The nomination of Musa Arafat sparked nearly unprecedented criticism from PA officials. Palestinian deputy cabinet minister Sufyan Abu Zaida said Musa Arafat was considered one of most corrupt officials in the Authority, and the commander of the Palestinian naval forces submitted his resignation Sunday in protest.

Musa Arafat said he will not resign in spite of protests.

Palestinians will not accept the nomination, and unrest in Gaza will only grow, Abu Zaida told Army Radio.

"This is infuriating," Abu Zaida said. "This shows disregard for people and their opinions. This is intolerable disregard, and in Gaza, thousands will rise up against this decision."

Juma Ghali, commander of the Palestinian navy, submitted his resignation to protest Musa Arafat's appointment as well as instability in Gaza.

In the midst of what appeared to be the most severe crisis of leadership in the Palestinian Authority since its inception, police and officers belonging to the Palestinian Military Intelligence under the command of Musa Arafat took over the structures housing the PA's television and radio stations as well as the main police stations in the city on Saturday.

The takeover took place a short while after a presidential decree was made public, instructing reforms in the security organizations, and placing his nephew in charge of most of the men in the various Palestinian security groups.

Initial signs of Egyptian involvement There were signs Sunday of Egyptian involvement in efforts to calm the Gaza situation.

Egypt’s foreign minister called on Palestinians to demonstrate unity and prove to the world that they are capable of establishing a state.

One of Arafat’s advisors is leaving for Cairo and meeting with senior officials to discuss the reforms and the disengagement.

Arab League Secretary General Amr Moussa called Arafat and expressed his confidence in Arafat’s ability to take control over the situation.

PA prime minister: There is a state of chaos Until recently, Musa Arafat had only headed Military Intelligence, but he now has charge over most personnel belonging to National Security and Force 17.

The decree also removes Ghazi Jabali from his post as commander of the Palestinian police in the Palestinian Authority. Jabali was kidnapped on Friday by armed Fatah men who demanded he be removed from his position and accused him of corruption.

"There is a crisis. There is a state of chaos in the security situation," said Prime Minister Ahmed Qureia after telling his cabinet that he had given his resignation to the PA chairman.

Qureia, who has been in the post for 10 months, has been unable to carry out deep reforms in the Palestinian Authority to root out corruption - as long as Yasser Arafat remained the dominant power in the Palestinian territories.

Yasser Arafat ordered a security shake-up in Gaza, merging 12 competing armed forces into three. After Arafat rejected his resignation, Qureia suggested his decision was on hold at least until a Palestinian Authority cabinet meeting on Monday.

Yasser Arafat also appointed Saeb al-Ajaz, commander of the northern brigade in the Gaza Strip, and known to be closely affiliated with the Palestinian leader, in charge of the Palestinian police.

The decree also announces the establishment of yet another security organization, that of the General Intelligence Apparatus, whose head still remains to be named.

Arafat was forced to carry out the changes following a series of armed kidnappings over the weekend of individuals affiliated with his leadership. These included Jabali, head of the Palestinian police, and Khaled Abu al-Ula, commander of the Palestinian liaison in the southern Gaza Strip. The kidnappers demanded reforms in the security organizations of the Palestinian Authority.

After the decree was aired, some supporters of reforms and activists responsible for an internal vote organized in recent weeks in the Gaza Strip took to the streets of Gaza.

The demonstrators, affiliated with Mohammed Dahlan, the former minister in charge of security affairs in the Palestinian Authority, and a powerful and influential figure in the Gaza Strip, considered to be the man behind the reform movement, denounced the appointment of Musa Arafat.

Musa Arafat is considered a bitter Dahlan opponent, and has been known to have links with the extensive network of smuggling that takes place through a network of tunnels between the Egyptian-controlled Sinai and the southern Gaza Strip.

Musa Arafat enjoys the support of the secretary-general of Fatah in the Gaza Strip, Ahmed Khals, who said Saturday that the kidnappings and the demonstrations in Gaza "are an attempt to create an alternative leadership to Yasser Arafat with the backing of Israeli elements."

The military wing of the Fatah in the West Bank and the Gaza Strip issued an announcement Saturday against the appointment of Musa Arafat and accused him of corruption.

Dahlan did not take part in the demonstration and was adamant in his refusal to comment on the situation.

Last week, in an interview to the New York Times, Dahlan said, "The Gaza Strip is at a crucial juncture; we will either gain independence or become Somalia."

The weekend events and the show of force by various groups of Fatah gunmen, including vocal criticism of Arafat, suggest the rift between Dahlan supporters and those close to Arafat is intensifying.

Saturday's demonstrations were particularly violent in their tone: One banner claimed "One dog, Jabali, is gone, and now is the time for another dog, Musa Arafat."

Musa Arafat has been targeted by protesters in the past, and has had a grenade fired at his offices by men affiliated with Dahlan.

Those close to Dahlan said they will not accept the appointment of Musa Arafat and are willing to undertake a "frontal confrontation" to remove him.

But sources close to Dahlan also said the confrontations will not deteriorate into civil war in the streets but will continue to take the form of kidnappings and possible assassinations.

A warning to Yasser Arafat from al-Aqsa Martyrs Brigades added to fears that violence could spiral.

It urged Arafat to try officials accused of corruption and said trouble could spread to the West Bank, home to 2.3 million Palestinians as well as Arafat and most of his Authority's institutions. Some 1.3 million Palestinians live in Gaza.

To those it branded corrupt, the Brigades said: "We will punish you if you don't repent and return the stolen money back to the people."