By Nidal al-Mughrabi GAZA, Dec 19 (Reuters) - A gunbattle erupted between Palestinian police loyal to Hamas and Fatah forces at the main hospital in Gaza on Tuesday, killing one person and wounding 11, witnesses and members of the rival factions said. Internal Palestinian fighting -- the worst in a decade -- has escalated since President Mahmoud Abbas called on Saturday for early elections in an attempt to break a political deadlock. Hamas accused Abbas of a "coup" against its elected government. The witnesses and rival factions said a Hamas policeman was killed in the gunbattle at the entrance and inside the compound of Shifa Hospital in Gaza City. The gunbattle began when Hamas police tried to detain Fatah security men, who belong to an intelligence service loyal to Abbas, on suspicion they had been involved in earlier clashes. Alarmed by a possible Palestinian civil war in the Gaza Strip and the occupied West Bank, the two factions declared a ceasefire on Sunday, only to see it undermined by renewed fighting and hostage-taking. Abbas told visiting British Prime Minister Tony Blair on Monday he was committed to early elections but left the door open for the formation of a Fatah-Hamas coalition with a "technocrat" cabinet that could satisfy Western countries. HAMAS STANCE Hamas, an Islamist group advocating Israel's destruction, has struggled to govern since taking office in March under the weight of Western sanctions imposed because of its refusal to recognise the Jewish state and renounce violence. The West has sought to bolster Abbas, who favours a two-state solution to end conflict with Israel. Israeli Prime Minister Ehud Olmert, in an apparent effort to shore up Abbas, said after meeting Blair that Israel planned to set up a joint committee with Palestinian officials that would discuss releasing Palestinians held in Israeli jails. A major amnesty could help Israel recover a soldier whose abduction by Gazan gunmen in June pushed Israeli-Palestinian relations to a new low in more than 6 years of fighting. While a Gaza truce declared by Abbas and Olmert last month has largely held, Israel has kept up military action in the West Bank. Israeli commandos shot dead a Fatah militant in the West Bank city of Nablus on Tuesday, witnesses said. An Israeli army spokeswoman said the militant tried to evade arrest. A second wanted militant was detained, she said.