Modulation of AGN gamma rays by interaction with X-rays from an   accretion disk hot spot
  We have developed a model for the variability of gamma ray emission in jets of active galactic nuclei in which the variability arises as a result of photon-photon pair production interactions with X-rays emitted by a hot spot in the inner part of the accretion disk. As the hot spot orbits around the central engine, the amount of absorption varies periodically. Our model may account for the observed variability of TeV emission from Markarian 421 and other blazars detected by the EGRET instrument on the Compton Gamma Ray Observatory, as well as correlated variations of X-ray and TeV gamma flux from Markarian 421. Quasi-periodic variations observed in Markarian 421 enable us to place an upper limit on the black hole mass of (2-30) times 10^8 solar masses. 
W. Bednarek and R.J. Protheroe