Hamas militiamen and Palestinian police attacked each other with assault rifles and grenades in a chaotic firefight Monday that turned downtown Gaza City into a battlefield and killed an aide to the Jordanian ambassador.

The shootout near the parliament building, which also wounded 11 people, was the worst fighting since the Hamas-led government sent its militia into the streets last week and increased fears the Palestinians were careening toward civil war.

The violence, which has killed eight people in two weeks, was fueled by a bitter power struggle between Palestinian President Mahmoud Abbas, a moderate from the Fatah Party, and Hamas militants who won January parliamentary elections and gained control of the Palestinian Cabinet.

Late Monday, a six-hour meeting between Hamas and Fatah representatives ended with agreement to try to defuse the conflict. The meetings are to continue daily, participants said.

The tension has played out on street corners throughout the Gaza Strip, where the bearded members of the 3,000-member militia — wearing their trademark camouflage pants, black shirts and black caps — stand guard a feet away from the Palestinian police, many of whom are Fatah loyalists.

Some of the Hamas militants appeared jumpy Monday, holding their rifles at the ready with their fingers hovering near the triggers. A rumor circulated through one group of fighters that it was in the cross-hairs of police snipers.

There are those on both sides who believe they can benefit from the fighting. Some Fatah officials are confident they will emerge victorious and be returned to power, or at least cause enough chaos to bring down Hamas.

Abbas, who has railed against the violence, told the Palestinian daily Al Quds that he has the power to disband the government and call elections. "But such a decision would not be justified unless Hamas gets a full opportunity (to rule)," he said. "If it fails, then we can talk about disbanding the government."

Hamas officials believe the new force is the only way they can assert power and gain respect after Abbas seized control of the Palestinian security branches.

In Washington, State Department spokesman Tom Casey condemned the violence and criticized the Hamas-led government for failing to protect its people. "We're troubled by this kind of escalation in intra-Palestinian violence," Casey said.

The nearly hourlong shootout Monday sent Palestinians fleeing and left a wide swath of Gaza City deserted.

The Preventive Security Service, a branch loyal to Abbas, said the fighting started when Hamas militiamen stopped one of its vehicles and fired on it. Hamas said the trouble began when some of its members came under fire during a patrol, sought cover and fired back.

A running battle ensued, with Hamas gunmen sealing off streets between the parliament and police headquarters and taking up positions behind trees, walls and cars. Some Hamas gunmen holed up in two buildings under construction hurled grenades and fired a rocket-propelled grenade at police. Palestinian police responded with rifle fire.

A small group of black-clad women marching with signs protesting the chaos ran for cover when gunfire erupted behind them.

Elsewhere, a car raced down a street and screeched to a halt after the driver was wounded. Hamas fighters accidentally shot at another car, which was carrying their comrades.

Khaled Radaida, 55, an aide to the Jordanian ambassador in Gaza, was killed as he drove past the gunfight in his Audi, which had a red diplomatic license plate. Three bullets hit the car's front windshield.

TV footage showed a Hamas gunman pressed against a wall firing a burst of gunfire across the road before a comrade fiercely gestured for him to stop. A few moments later, the Jordanian vehicle, with a bullet hole in the windshield, was seen slowly moving down the road before stopping and rolling backward.

The ambassador, Yehiya Qarallah, was not in the vehicle. He was taken under police escort to the morgue to identify Radaida and sobbed as he left the building.

Jordan demanded an immediate inquiry into the shooting, which came amid increased tensions between Hamas and the Jordanian government. Jordan has accused Hamas of smuggling weapons into the kingdom for use in attacks against public institutions and officials.

Palestinian Prime Minister Ismail Haniyeh called the Jordanian ambassador, offering condolence and pledging an inquiry.

Fatah held Hamas responsible for the killing. Maher Maqdad, a Fatah spokesman, said the existence of the new militia violated the law, and it had no business patrolling near police headquarters. "When are they (Hamas leaders) going to realize that this unit is illegal and when are they going to dismantle it?" he said in a text message to The Associated Press.

Hamas spokesman Sami Abu Zuhri said the fighting was triggered by "suspicious figures" whom he said fired on both Hamas and police to stir trouble.

In all, 11 people were hurt, including a paramedic sent to tend to the wounded, hospital officials said.

The fighting followed two weekend assassination attempts against security commanders loyal to Abbas. Fatah officials hinted they believed Hamas was behind the incidents but stopped short of making an open accusation.

Early Monday, a gunman linked to Fatah was killed near the southern Gaza city of Khan Younis. Fatah said two of its fighters were ambushed in their car, while Hamas said the firefight was triggered by a Fatah attempt to kidnap a Hamas member. A second Fatah gunman was wounded.