Abstract
(Abridged) We consider the interaction of a relativistically-moving shell, composed of thermal photons, a reversing magnetic field and a small admixture of charged particles, with a dense Wolf-Rayet wind. A thin outer layer of Wolf-Rayet material is entrained by the jet head; it cools and becomes Rayleigh-Taylor unstable, thereby providing an additional source of inertia and variability. Pair creation in the wind material, and the associated pre-acceleration, defines a characteristic radiative compactness at the point where the reverse shock has completed its passage back through the shell. We argue that the prompt gamma-ray emission is triggered by this external braking, at an optical depth ~1 to electron scattering. Torsional waves, excited by the forced reconnection of the reversing magnetic field, carry a fluctuating current, and are damped at high frequencies by the electrostatic acceleration of electrons and positrons. We show that inverse Compton radiation by the accelerated charges is stronger than their synchrotron emission, and is beamed along the magnetic field. Thermal radiation that is advected out from the base of the jet cools the particles. The observed relation between peak energy and isotropic luminosity is reproduced if the blackbody seeds are generated in a relativistic jet core that is subject to Kelvin-Helmholtz instabilities with the Wolf-Rayet envelope. This relation is predicted to soften to E_peak ~ L_iso^{1/4} below an isotropic luminosity L_iso ~ 3x10^{50} ergs/s. The duration of spikes in the inverse-Compton emission is narrower at higher frequencies, in agreement with the observed relation. The transition from prompt gamma-ray emission to afterglow can be explained by the termination of the thermal X-ray seed and the onset of synchrotron-self-Compton emission.

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