During this phase you can fire your ships' guns and missiles at enemy targets in the same sector.  A ship may fire any or all of its guns in the same turn, against one or more targets.  Each gun fired always hits and does one DP of damage against the intended target.  A ship may not move and commit guns to an attack in the same turn.  Any missiles fired during this phase are considered expended (and destroyed) even if they do not inflict damage upon a ship. 
 
Although there are an endless number of possible combat configurations, ship-to-ship gun battles typically fall into two categories: automatic and manual.
 
Allies: Allied empires may never fire guns or missiles at each other's ships, with the exception of unloading cargo.
 
 
Abandoned Empires: Abandoned ships will always fire at non-allied ships present at friendly or allied worlds, or at ships belonging to any empire which fired on the abandoned empire during the previous turn.
 
Abandoned ships present at foreign, non-allied worlds will fire guns if they expect to destroy all foreign ships present.
 
Abandoned ships between worlds will fire upon any empire targeted by either of the above two criteria.
 
If multiple empires are targeted in the same sector, the abandoned ships will first fire upon the empire having the fewest remaining DP (or tonnage if there's a tie).