Violence escalated across the Palestinian territories late Monday. Palestinian President Mahmoud Abbas has declared a "state of alert" and ordered security forces to restore order.

Fatah militants throw paperwork out from Palestinian parliament building in West Bank town of Ramallah

In a dramatic escalation of violence that has been simmering for several days, hundreds of gunmen loyal to President Abbas' Fatah Party set fire to the West Bank office of Hamas Prime Minister Ismail Haniyeh in Ramallah. The office is unoccupied because Israeli travel restrictions prevent Hamas leaders from traveling from Gaza to the West Bank. A short while later gunmen loyal to Fatah, fired on the Palestinian Parliament building in Ramallah, setting it on fire.

The violence in the West Bank followed gun battles in Gaza between Hamas and Fatah, where at least one Hamas militant was killed and more than a dozen others wounded.

Tensions have risen dramatically since Saturday when President Abbas ordered a referendum to be held on July 26th, when Palestinians will be asked to approve a measure that calls for a Palestinian state to exist alongside Israel. The measure, if approved, would in effect call on Hamas to recognize Israel -- something Hamas has refused to do.

Ali Jarbarwi a professor of political science at Bir Zeit University in Ramallah says the quarrel between Hamas and Fatah over the referendum could escalate. "The coming forty days until we have the referendum is going to be dangerous, difficult and enflamed basically. If they do not reach and agreement on stopping this referendum, and reach an agreement between the president and the Hamas government, I think we are going to see an escalation internally, especially in Gaza, and also an escalation between Palestinians and Israelis. That would enflame the whole situation," he said.

Earlier in the day Hamas legislators meeting in Gaza backed off a threat to block the referendum from taking place. Hamas holds a parliamentary majority in the Palestinian parliament.

Tensions between Palestinians and Israelis are also at the boiling point as Palestinian militants continue to fire homemade Qassam rockets at towns in southern Israel near the Gaza border. Hamas gunmen who had been observing a truce with Israel have taken the lead in firing the rockets after eight Palestinians were killed on a beach in Gaza last week during an Israeli military bombardment of a nearby area. Israel has begun an investigation into the incident.