Sweets and tears in Gaza at Eid

GAZA, Oct 12 (Reuters) As Muslims marked the Eid el-Fitr holiday with gifts and feasts today, Palestinians in the Gaza Strip felt the tightening grip of an Israeli embargo and mourned the dead from factional fighting.

Fluttering banners showed up the division: yellow in a few areas for Palestinian President Mahmoud Abbas's Fatah faction, many more green flags for the Hamas Islamist movement, whose forces routed Fatah in June.

Although there were no reports of trouble as people gathered to mark what should be one of the happiest days of the year, the fear was never far from the surface in the coastal enclave of 1.5 million.

''It's a sad Eid,'' said Abu Ali, 60, as he walked to his mosque.

''It comes with the brothers far apart, as enemies.'' Fatah this week rejected a new call for dialogue from Hamas leader Ismail Haniyeh, who was dismissed as prime minister by Abbas in June following what the president described as a ''coup'' in Gaza. Over 160 people were killed in the June battles.

Haniyeh renewed his message to thousands of worshippers assembled for prayers, telling them: ''There are wounds in every house but we need to rise above the pain. Let's shake hands and let love and harmony prevail.'' But there is little sign Abbas is ready to listen.

His moves to isolate Hamas have won him the promise of talks on a peace deal with Israel and an end to international sanctions in the West Bank that were imposed on Palestinian areas after Hamas won a parliamentary election last year.

In the West Bank, Palestinians were more upbeat as people got together for family celebrations.

But Gaza's borders have been virtually sealed to all but essential supplies, casting a shadow over the holiday.

SHORTAGES New clothes, a traditional purchase at this time of year, were hard to find in Gaza this week and prices for old stock had also risen sharply.

''People are poor, they are virtually dead. Parents can hardly feed their children,'' said mother-of-five Umm Mohammad as she hunted bargains yesterday. ''Sometimes you have to choose between food and new clothes.'' One shoe salesman told customers to be grateful for what they could still find: ''The situation is tragic,'' he said. ''But I'll be happy if things stay this bad -- it could get worse.'' Though Eid is traditionally a day of joy, many Palestinians also choose to visit family graves, especially those of ''martyrs'' killed in the conflict with Israel.

This year, many of the freshest memorials in Gaza are to those killed by their neighbours during the bloodshed in June.

One woman whose son died fighting Israeli troops in 2000 said his death had made her proud -- unlike that of another relative who had died during the June battles: ''I am happy my son was killed by the Jews and not by Palestinians.

''How could a Muslim kill a Muslim? How could a brother kill his brother?'' she asked. ''It is against our religion.'' Nayef Kali mourned his daughter, a mother of six, who was also caught up in the clashes: ''I am sad she was killed by Arab arms, arms that should be aimed at the Jews, not each other.

''I hope my daughter's blood is the last to be shed.'' REUTERS PD BD1811