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By Alan Johnston
BBC News, Gaza
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Initial results suggest that the traditional Palestinian party of power - Yasser Arafat's Fatah faction - has emerged on top in an important round of local elections in the West Bank and Gaza.
Hamas is challenging Fatah's traditional political monopoly
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But the militant movement, Hamas has again demonstrated that it is mounting a major challenge.
Both say they did better than the early results suggest, and there are serious disputes over the outcome in two key Gaza constituencies.
But election officials say the initial indications are that Fatah won around 55% of the vote, to Hamas' 35%.
According to the officials, Fatah won just over 52 of the municipalities being fought for. Hamas took around 30.
And these results matter. They shed light on a process of significant change that is sweeping through the Palestinian political system.
Electoral test
The Fatah faction that Mr Arafat founded and led dominated the political scene for decades.
Under his leadership elections were rare. But now a phase of democratisation has begun, and Fatah is being put to the electoral test.
These municipal polls are to be followed by a general election in a few months time.
And Fatah is locked in a major contest with Hamas.
The militant Islamist movement has traditionally concentrated on its confrontation with Israel. But now it is moving into the democratic political arena.
In the last bout of local elections in January - held only in Hamas's Gaza stronghold - Fatah suffered a series of landslide defeats.
A repeat performance this time out would have been disastrous. But this was avoided.
Many Palestinians want a more representative political system
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As one senior Fatah spokesman put it, the results showed that his party "remained the biggest force on the Palestinian street".
And another spokesman said Fatah had learnt its lessons from the defeats of January.
It had found a more open system designed to produce a better, stronger slate of candidates.
But Hamas too can take strength from this election.
It won important contests in big population centres, like the town of Rafah in Gaza, and Qalqilya in the West Bank.
Hamas is claiming that the final results will show that it won half the seats it contested.
Up for the fight
But even if it wins no more than the 35% of the vote that officials say it scored, that will not be a bad result.
If Hamas could do the same come July's general election it might take a third of the seats.
And Hamas is up for the fight.
"We're not afraid of any election," said a Hamas spokesman, Mahmood Zahar.
"We enjoy massive support on the popular level both as a liberation movement and representatives of true Islam."
In Israeli eyes, Hamas is the worst kind of terrorist enemy.
Its charter still speaks of ultimately seeking to destroy Israel, and its suicide bombers have struck repeatedly.
But its supporters regard Hamas as merely hitting back in retaliation for decades of dispossession and occupation at Israeli hands.
If the movement is able to exert significant influence over parliament and the decision making process here it will do everything it can to ensure that the Palestinian side drives the hardest possible bargain in any dealings with Israel.
But many Palestinians welcome the prospect of the ending of Fatah's monopoly on parliamentary power.
They want to see the emergence of a more democratic, representative political system.