  Gamma-Ray Bursts (GRBs), short and intense pulses of low energy gamma-rays,
have fascinated astronomers and astrophysicists since their unexpected
discovery in the late sixties. During the last decade, several space missions:
BATSE (Burst and Transient Source Experiment) on Compton Gamma-Ray Observatory,
BeppoSAX and now HETE II (High-Energy Transient Explorer), together with ground
optical, infrared and radio observatories have revolutionized our understanding
of GRBs showing that they are cosmological, that they are accompanied by long
lasting afterglows and that they are associated with core collapse Supernovae.
At the same time a theoretical understanding has emerged in the form of the
fireball internal-external shocks model. According to this model GRBs are
produced when the kinetic energy of an ultra-relativistic flow is dissipated in
internal collisions. The afterglow arises when the flow is slowed down by
shocks with the surrounding circum-burst matter. This model has numerous
successful predictions like the prediction of the afterglow itself, the
prediction of jet breaks in the afterglow light curve and of an optical flash
that accompanies the GRBs themselves. In this review I focus on theoretical
aspects and on physical processes believed to take place in GRBs.
