RAMALLAH, West Bank,(Reuters) – Palestinians voted on Wednesday in their first parliamentary election in a decade, a ballot that could bring the militant Islamic movement Hamas into the government and further dim prospects for peacemaking.

Opinion polls showed President Mahmoud Abbas’s Fatah party with just a slight edge, raising the spectre of Hamas, committed to Israel’s destruction and listed by Washington as a terrorist group, joining the Palestinian cabinet for the first time.

Across the West Bank and Gaza, Palestinians filed into polling stations where their fingers were daubed with blue ink, a measure to prevent voting fraud, before casting their ballots.

Thousands of Palestinian police with automatic rifles guarded voting booths after weeks of armed chaos in Palestinian areas that had threatened to delay the election.

Casting his ballot in Ramallah, Abbas — who has called the election an important step toward Palestinian statehood — said voting was proceeding smoothly and that he hoped it would be completed in “complete calm”. Polls close at 7 p.m. (1700 GMT).

“The final decision will be made through the ballot boxes,” he told reporters.

Israel has cautioned that future peacemaking would be in doubt if Hamas, the main group behind suicide bombings during a five-year-old uprising, was given a role in the Palestinian government. Washington has also voiced concern.

Sticking to a hard line, Hamas vowed on Wednesday to retain its weapons and its official charter calling for Israel’s destruction even after its members enter parliament.

Polls show Hamas, standing on an anti-corruption platform in its first run for parliament, just a few percentage points behind Abbas’s long-dominant Fatah party, which advocates a two-state solution with Israel.

Fatah and Hamas have both said they would consider forming a coalition government after Wednesday’s election.

In Gaza, Hamas supporters wearing the group’s trademark green hats and bandannas deployed near polling places. “We want to change the government,” said Hamas voter Baher al-Rayes, 23.

Some 1.4 million people in Gaza, the occupied West Bank and Arab East Jerusalem were eligible to vote for the 132-member parliament. Election officials expected a high turnout.

Voters were choosing from among 11 party lists across the Palestinian areas and more than 400 candidates running locally in the first parliamentary elections since 1996.

About 900 foreign observers, led by former U.S. President Jimmy Carter, were monitoring the process.

Militant groups had pledged to keep their weapons out of sight. In the West Bank city of Nablus, 42 Fatah militants left their arms behind and went en masse to a local polling station.

Israeli troops pulled back from Palestinian population centres to avoid accusations of interfering in the polls in the West Bank, which Israel captured in the 1967 Middle East War.

But Israel kept its forces on a high alert to prevent attacks by Islamic Jihad, a group boycotting the ballot and which carried out a suicide bombing in Tel Aviv last Thursday.

Hamas has largely followed a truce for nearly a year, and a senior official said this week that indirect talks with Israel were “not taboo”.

Hamas was expected to capitalise on Fatah’s image for corruption, mismanagement and infighting. The Islamist group has gained popularity not only for its fight against Israel but for its charity work in Palestinian areas.

If Hamas does well enough at the polls, it could be offered cabinet seats under a power-sharing arrangement

Abbas hopes once Hamas enters parliament it might be prepared to relinquish its weapons, a process that is meant to start under a U.S.-sponsored peace “road map”. Israel insists there will be no political talks until militants are disarmed.

But Ismail Haniya, a senior Hamas leader in Gaza, said: “The Europeans and the Americans are telling Hamas to choose between arms and parliament. We say we will go for arms and parliament.”

On the eve of the vote, U.S. Secretary of State Condoleezza Rice said Washington would have practical problems dealing with Hamas because of its classification as a terrorist group.

Interim Israeli Prime Minister Ehud Olmert, in his first policy speech since assuming the powers of Ariel Sharon who suffered a stroke on Jan. 4, said he hoped the Palestinians would elect a government ready to follow the road map. He is widely favoured to win Israel’s March 28 election.