(Abridged) We interpret gamma ray bursts as relativistic, electromagnetic explosions. Specifically, we propose that they are created when a rotating, relativistic, stellar-mass progenitor loses much of its rotational energy in the form of a Poynting flux during an active period lasting $sim 100$ s. Initially, a non-spherically symmetric, electromagnetically-dominated bubble expands non-relativistically inside the star, most rapidly along the rotational axis of the progenitor. After the bubble breaks out from the stellar surface and most of the electron-positron pairs annihilate, the bubble expansion becomes highly relativistic. After the end of the source activity most of the electromagnetic energy is concentrated in a thin shell inside the contact discontinuity between the ejecta and the shocked circumstellar material. This electromagnetic shell pushes a relativistic blast wave into the circumstellar medium. Current-driven instabilities develop in this shell at a radius $sim3times10^{16}$ cm and lead to dissipation of magnetic field and acceleration of pairs which are responsible for the $gamma$-ray burst. At larger radii, the energy contained in the electromagnetic shell is mostly transferred to the preceding blast wave. Particles accelerated at the forward shock may combine with electromagnetic field from the electromagnetic shell to produce the afterglow emission.
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