Fatah leader President Mahmoud Abbas remains in the West Bank, seemingly powerless to stop the warfare.
So far, the Hamas-Fatah battles in the Gaza Strip have not provoked any major fighting in the West Bank. But there are fears Fatah could launch an offensive there if its forces continue to lose ground in Gaza.
Abbas, a moderate member of Fatah in the coalition government, ordered his elite presidential guard to strike back. But his forces were quickly crumbling under the onslaught by the better-armed and better-disciplined Islamic fighters.
Hamas fighters overran Fatah's Preventive Security headquarters in the Gaza Strip on Thursday; witnesses said the victors dragged vanquished gunmen from the building and executed them in the street.
Fatah officials said seven of their fighters were shot to death in the street outside the Preventive Security headquarters. A witness, Jihad Abu Ayad, said the men were being killed before their wives and children.Read More
Mr Abbas says there will be a caretaker administration and early elections.
But PM Ismail Haniya, of Hamas, says his government will press on and he will impose decisive law and order.
Overnight the green flags of Hamas were flying over most parts of Gaza and Hamas supporters celebrated in the streets.
Earlier Hamas fighters had overrun remaining Fatah positions including the headquarters of Fatah's Preventative Security force and the presidential compound in Gaza City.
Fatah fighters were seen being led away, stripped to the waist, their fate unknown.
"All of the headquarters of the security services in the Gaza Strip are under control of the Ezzedine al-Qassam Brigades, including the presidency," Abu Obeida, a spokesman for Hamas' armed wing, told the AFP news agency.
The BBC's Matthew Price in Jerusalem says the West Bank and Gaza Strip will now effectively be split from one another - Gaza run by Hamas and the West Bank by Fatah.Read More