Palestinians had long been preparing for the worst
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Palestinian leader Yasser Arafat, who led his people's struggle for 40 years, has died aged 75 in a French hospital.
The Israeli government, which branded him a terrorist, has suggested his death could be a turning point for peace in the Middle East.
His body will go to Cairo for a funeral attended by Arab and other leaders before burial in Ramallah on Saturday.
People wept openly in the Palestinian territories, where the authorities declared 40 days of mourning.
Mr Arafat died of multiple organ failure at 0330 (0230 GMT) on Thursday - a "black day" in Palestinian history, in the words of Palestinian chief negotiator Saeb Erekat.
Mr Arafat's many powers are being divided among his officials, with Mahmoud Abbas elected head of the Palestine Liberation Organisation and Rawhi Fattuh sworn in as acting president of the Palestinian Authority (PA).
Flags have been flying at half mast outside the late Palestinian leader's compound in Ramallah, set to be his last resting place.
People have been wearing chequered headscarves - Mr Arafat's trademark - and in the Gaza Strip, thousands took to the streets as mosque loudspeakers played quotes from the late leader.
"Our father is dead," construction worker Fathi Abu Adnan told Reuters news agency in Gaza City as mourners let off volleys of bullets into the air.
Israel has sealed off the West Bank as a security precaution and strengthened security at Jewish settlements.
'Significant moment'
French President Jacques Chirac paid tribute to "a man of courage and conviction who for 40 years incarnated the Palestinians' fight for recognition of their national rights".
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YASSER ARAFAT: KEY DATES
24 Aug 1929: Born in Cairo
1958: Founds Fatah
1969: Elected PLO chairman
1974: Addresses UN General Assembly
1982: Expelled from Lebanon by Israelis
1990: Supports Saddam Hussein during First Gulf War
1991: Marries Suha Tawil
1993: At the White House signs peace agreement with Israel
1994: Jointly awarded Nobel peace prize with Rabin and Peres
2001: Israel blockades him inside Ramallah headquarters
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Israeli Prime Minister Ariel Sharon said the death could be a turning point for peace if the Palestinians "ceased terrorism" and waged a "war on terror".
Earlier, Justice Minister Tommy Lapid said it was good that the world was "rid" of Mr Arafat, whom he described as "the leader of terrorism against Israel".
The White House simply described the death as a "significant moment in Palestinian history", and offered condolences.
It has not been made clear what illness the Palestinian leader was suffering from, though doctors ruled out cancer and rejected the allegation - repeated on Thursday by the Hamas militant group - that he had been poisoned.
He had been in a coma since 3 November and on Tuesday suffered a brain haemorrhage. In his final hours he had brain damage and kidney and liver failure.
He had been brought to a military hospital near Paris from Ramallah on 29 October as tests showed he had a low count of blood platelets, needed for clotting.
In Ramallah, officials said Mr Arafat may be interred in a stone coffin so that one day his body can be moved to Jerusalem where Palestinians hope to have the capital of a future independent state.
Funeral
President Chirac visited the hospital where Mr Arafat died to pay a personal tribute, saying he wished to bow before Mr Arafat and send a message of friendship and solidarity to the Palestinian people and their representatives.
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FUNERAL ORDER
Thurs: French leaders pay respects before body is flown to Cairo, arriving late at night
Fri morning: Funeral at King Faisal Mosque near Cairo airport
Sat: Body is interred in Ramallah compound in West Bank
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The body will be flown to Cairo early on Thursday evening.
Friday's funeral ceremony will be held at a mosque near Cairo's international airport, from which a helicopter will then transfer the coffin to Ramallah.
Among the few non-Muslim heads of state or government expected to attend the funeral are South African President Thabo Mbeki and Swedish Prime Minister Goran Persson.
Other countries such as the UK are sending their foreign ministers.
Bulldozers have been clearing a space at Mr Arafat's compound in Ramallah for his grave.
In the absence of a clear line of succession, Palestinian leaders have agreed a plan to prevent a power struggle and chaos in the volatile Gaza Strip:
- Parliamentary speaker Rawhi Fattuh takes over as PA president of the Palestinian Authority for 60 days, when an election is held
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Prime Minister Ahmed Qurei takes over some of Mr Arafat's other powers
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Mahmoud Abbas takes over at the PLO, headed by Mr Arafat for more than 40 years
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Farouk Kaddoumi takes over as head of Fatah, the movement co-founded by Mr Arafat in 1958.
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He kept Palestine alive
