Thousands of wailing Palestinians went to the streets Thursday on hearing the news that their leader Yasser Arafat had passed away at a French hospital in the wee hours.

It was cloudy in Gaza. Deep sorrow and grief gripped almost everyone in cities, towns and refugee camps in the Gaza Strip.

People gathered in mosques to read Koran verses for Arafat's spirit.

Young men burned tires at crossroads in different towns and villages, which sent plumes of black smoke into the sky. Militants fired gunshots to pay their tribute to the demised leader.

Ahmed Ghazawi, 34, said with tears in eyes: "Allah (God) may mercy you, Abu Ammar (Arafat's nickname)."

Jamil Abu Hamdan, a government employee, said "As I heard the news, I went out from my house like crazy. I don't know what to do, where to go, shall I cry or shall I keep silent."

Samir Masharawi, a Fatah member, said that "Arafat left us without leaving castles or money, he left us a dream that we hope to achieve."

Hamas mourned the death in statement.

"In spite that the Palestinian people had lost a great leader the people will be more steadfast and continue resistance against Israel," the statement said.

The Islamic Jihad (Holy War) said "We don't feel pessimistic in this particular day despite the great grief and sadness. What happened in Palestine urges us to keep carrying the flag of the armed resistance and keep confronting the occupation."

A 40-day general mourning was declared Thursday in the Palestinian territories for the death of Arafat.

Flags were flown at half mask at Palestinian institutions in the West Bank and Gaza. Government institutions, shops and schools were closed.

The body of Arafat will be flown from France to Cairo late Thursday.

Egypt is expected to hold a short and official funeral service for Arafat on Friday at the Cairo International Airport, where Arab and world leaders will come and pay their last respects to the late Palestinian leader.

Then the body will be flown back to the West Bank city of Ramallah for burial at Arafat's battered headquarters on Friday.