Unsteady activity of gamma-ray burst sources leads to internal shocks
in their emergent relativistic wind. We study the emission spectra fro
m such shocks, assuming that they produce a power-law distribution of
relativistic electrons and possess strong magnetic fields. The synchro
tron radiation emitted by the accelerated electrons is Compton upscatt
ered multiple times by the same electrons. A substantial fraction of t
he scattered photons acquire high energies and produce e(+)e(-) pairs.
The pairs transfer back their kinetic energy to the radiation through
Compton scattering. The generic spectral signature from pair creation
and multiple Compton scattering is highly sensitive to the radius at
which the shock dissipation takes place and to the Lorentz factor of t
he wind. The entire emission spectrum extends over a wide range of pho
ton energies, from the optical regime up to TeV energies. For reasonab
le values of the wind parameters, the calculated spectrum is found to
be in good qualitative agreement with the observed burst spectra.