Palestinian men attend a Fatah pre-election rally in front of a poster of late Palestinian leader Yasser Arafat, left, in Gaza City, Monday Jan. 23, 2006

On Wednesday, January 25, Palestinians will go to the polls for their first parliamentary elections in a decade, and Middle East analysts are predicting that the militant group Hamas will win a significant share of power. This represents a major setback for Fatah, which has controlled the Palestinian government for years, and could have a significant impact on hopes for the peace process.

The Fatah movement, the secular party founded by the late Yasser Arafat, has led the Palestinian national cause for decades.

Analysts predict it will almost certainly lose its complete power over the Palestinian Authority, following parliamentary elections.

Khalil Shikaki, a commentator and pollster on Palestinian affairs, says the decline in Fatah is primarily due to a generational conflict.

The clash is between the so-called old guard that went into exile with Mr. Arafat, a middle generation that grew up with Israeli occupation, and a younger group of gunmen that came to power during the intifada, a more than five-year armed conflict with the Jewish state.

Shikaki says the latest polls show Fatah is unlikely to win a majority in the 132-seat parliament and the militant group Hamas appears poised to win more than a third of the seats in the legislature.

"The answers to why this happened are basically three," he said. "One is the fragmentation of Fatah, the other is the gradual collapse of the Palestinian Authority, and the third is Hamas."

Both the United States and Israel say the radical Islamic group Hamas is a terrorist organization, responsible for dozens of deadly suicide bombings and committed to the destruction of Israel.

But Hamas is gaining support among Palestinians concerned about corruption, unemployment, and a lack of security, especially in the Gaza Strip.

Khalil Shikaki says many Palestinians blame Fatah, and that will hurt the party at the polls.

"The overwhelming majority of Palestinians see the collapse of law and order as Fatah's doing, that Fatah is responsible for the collapse of law and order," continued Shikaki. "If it cannot put its act together to deal with this primary goal of government, how could it be counted on to do more, to lead?"

The new Palestinian representative to the United States, Afif Safieh, is a member of Fatah. He concedes the party is fractured and is likely to suffer at the polls after years of dominance.

"Yes, we have suffered as Fatah from political erosion from the assumption of power," said Safieh. "Everybody suffers from erosion of power after years of management and some mismanagement. I always said that within Fatah we had always this challenge on how to reconcile internal democracy with external discipline."

Hamas, which is running under the slogan "Change and Reform", is committed to keeping its armed wing, although Palestinian President Mahmoud Abbas has promised to disarm all major militant groups following the elections.

Former senior U.S. diplomat and Middle East peace negotiator Dennis Ross says Hamas is about to take on a different character than it has had in the past, with the potential of being both a member of government and a power broker in Palestinian politics.

Ross says the reaction of the Israeli government is not entirely predictable.

"One could be an effect in which Israelis are even prone more towards adopting a unilateralist impulse on the grounds that well there is not going to be a Palestinian partner ever," noted Ross. "The other could be that, in fact, the more they look at the likelihood of Hamas being a power broker the more they become concerned about their security and whether or not they can actually be out of the territories."

Hamas has opposed the peace process with Israel, and if it wins a significant number of seats in parliament the group will be in a strong position to advocate its opposition to negotiations and its support of a greater role for Islam in everyday life.

Senior Fatah members do not want Hamas to gain such power, and there is concern the election could be marred by violence.