RAMALLAH, West Bank - Yasser Arafat, revered as the beacon of Palestinian statehood but reviled as a sponsor of terrorism, died today at the age of 75.

His passing marked the end of an era in modern Middle East history, and prompted calls from President Bush and other world leaders to seize the moment to spur new efforts at Israeli-Palestinian peacemaking.

A wave of grief quickly swept across the West Bank and Gaza Strip after Arafat died in a French military hospital at 3:30 a.m.

Thousands of Palestinians ran into the streets, clutching his photograph, crying and wondering about their future without the man who embodied their struggle for statehood.

"He is our father," Namia Abu-Safia, 48, said sobbing in the Jebaliya refugee camp in the Gaza Strip. "He is Palestine."

Black smoke from burning tires rose across the Gaza Strip, gunmen fired into the air in grief. Palestinian flags at Arafat's battered compound here were lowered to half staff. Church bells rang out, and Quranic verses were played for hours over mosque loudspeakers. Palestinian officials announced 40 days of mourning for Arafat.

Fearing the mourning could rapidly turn into rioting, Israel quickly sealed the West Bank and Gaza Strip and increased security at Jewish settlements.

The death of Arafat, who ruled firmly over squabbling Palestinian factions for four decades, left Palestinians without a strong leader for the first time. It raised concern that the scramble to claim Arafat's mantle could fragment the Palestinian leadership or spark chaos and factional fighting in the streets.

In a hurried effort to project continuity, the PLO elected former Palestinian Prime Minister Mahmoud Abbas as its new chief, virtually ensuring that he will succeed Arafat as leader of the Palestinians, at least in the short term.

The Palestinian legislature also swore in Parliament Speaker Rauhi Fattouh as caretaker president of the Palestinian Authority until elections can be held in 60 days, according to Palestinian law.President Bush said the passing of Arafat was a "significant moment" in Palestinian history and expressed hope that Palestinians would achieve statehood and peace with Israel."During the period of transition that is ahead, we urge all in the region and throughout the world to join in helping make progress toward these goals and toward the ultimate goal of peace," he said.Israeli Prime Minister Ariel Sharon, who has shunned his longtime nemesis as a terrorist and obstructionist, said Arafat's death could serve as a "historic turning point in the Middle East" and expressed hope the Palestinians would now work to stop terrorism.Insisting that with Arafat at the helm it was impossible to discuss peace with the Palestinians, Sharon had pushed forward with his "unilateral disengagement" plan. Under the plan, Israel will evacuate the Gaza Strip next year and continue building a West Bank barrier to separate Israelis from Palestinians.Nabil Shaath, the Palestinian foreign minister, called on Israel to resume implementation of the U.S.-backed "road map" peace plan. He said that Israel had used its dislike for Arafat as an excuse for avoiding obligations to withdraw from West Bank towns."Now, the road is open, and we are telling the Israelis, welcome. If you want to implement the road map, then implement it," Shaath said.Arafat was flown to a French military hospital in Clamart, outside of Paris, on Oct. 29 after his health began deteriorating last month. It was the first time in nearly three years that he left his compound in Ramallah, where he was held a virtual prisoner by Israel.Palestinian officials initially insisted he had a lingering case of the flu, but they grew increasingly concerned when he did not recover.Neither his doctors nor Palestinian leaders would say what killed him.