Yasser Arafat, leader of the Palestinian people for the last three decades, died early this morning in a Paris hospital.
Palestinians poured onto the streets of the West Bank and Gaza Strip, where flags were lowered to half mast, at the news of the death of the 75-year-old president of the Palestinian authority.
World leaders also paid tribute to the Palestinian leader, while his long time enemy, Israeli prime minister Ariel Sharon described his death as an "historic turning point in the Middle East".
The Palestinian leadership acted quickly to fill the power vacuum, electing the former Palestinian prime minister, Mahmoud Abbas, unanimously as the new head of the Palestine Liberation Organisation (PLO).
Cabinet minister Ibrahim Abu Najah confirmed that he is unlikely to face a challenger in the Palestinian authority's presidential elections, which must be held within the next 60 days.
In the meantime, the speaker of the Palestinian parliament, Rauhi Fattouh, will be sworn in later today as caretaker president.
"We can be certain the transition will be smooth, and the Palestinian people deserve to have free and fair elections," another cabinet minister, Saeb Erekat, told reporters.
On October 29, after a serious deterioration in his health, Mr Arafat flew out of his West Bank compound in Ramallah, where he had been a virtual prisoner of the Israeli army for the last two years.
He was taken to the French military hospital Percy, in the Paris suburb of Clamart, for treatment, but was thought to have suffered a brain haemorrhage on Tuesday.