• *Photospheric Emission*

For *rph r<sup>s</sup>* , a large fraction of the kinetic energy is dissipated below the photosphere [114]. The produced non-thermal photons cannot directly escape and are advected

with the flow until the transparency. Within the flow, multiple Compton scatterings occur and modify the synchrotron spectrum of the heated electrons, which rapidly cool, mainly by IC scattering. The electron distribution becomes quasi-Maxwellian, with a temperature determined by the balance between heating (external and by direct Compton scattering of energetic photons), and cooling (adiabatic and radiative) [115]. Finally, the photon field is modified by the scattering from the quasi-Maxwellian electron distribution [114].

Furthermore, the thermal photons of the fireball contribute as seed for IC scattering, hence the non-thermal electrons, heated by energy dissipation below the photosphere, rapidly cool, and reach a quasi-steady state distribution [101]. The result is a *two temperature plasma*, with electron temperature *T<sup>e</sup>* > *Tph*. If dissipation processes occur at intermediate optical depth *τ* ∼few–few tens, the resulting spectrum is:


The spectral slope obtained in the above 2) is similar to the high energy spectral slope in GRB spectra, h*β*i ∼ −2; thus, it could be concluded that *E<sup>p</sup>* is associated with *Tph*. However, recently, Fermi data have shown thermal peaks at lower energies than *Ep*, which points rather to the more natural interpretation that the thermal peak is associated with *Tph* and suggests that *E<sup>p</sup>* may be associated with *T<sup>e</sup>* or with the synchrotron emission. Moreover, if dissipation occurs at *τ* & 10<sup>2</sup> , the resulting spectra is thermal-like. On the other hand, for *τ* ., a few more complex spectrum forms, with the main contribution coming from synchrotron photons (emitted by the electrons) below the thermal peak and above it from multiple IC scatterings (leading to a nearly flat energy spectrum) [115]. All of the above discussions are viable for dissipation processes from highly magnetized plasma as well [86,116].

However, the above model also suffers two major drawbacks, since it cannot explain

