Palestinians are voting for a new parliament at polling stations throughout the Gaza Strip, as well as in the occupied West Bank and East Jerusalem.
Polling stations opened early and lines soon began to form as Palestinians came to cast their ballot for the 132-member legislature.
Election officials said that by midday about 40 percent of the more than one million eligible voters had voted.
The first parliamentary election in 10 years is proving to be a close contest between the ruling, mainstream Fatah faction and the militant Islamic group Hamas.
Security has been tight amid fears that activists might try to derail or influence the vote. That did not happen.
Palestinian journalist Mohammed Dawas reports from Gaza that while Fatah and Hamas activists gathered around polling sites to promote their candidates, they came without guns.
"Both Fatah and Hamas activists are found in every polling station. Everybody is pushing the people to vote for him [i.e., for their candidates]. No guns, nothing in the street - only the police carrying guns," said Dawas.
Hamas has traditionally had strong support in the Gaza Strip and in recent local elections the group made a strong showing in both Gaza and the West Bank. But this is the first time Hamas is taking part in broader legislative elections and its campaign promises of clean government and change resonate with many voters.
"Some voters said we are coming to vote for Hamas because we want to vote for change, while other people said we are going to vote for other small parties because also we want some change," said Palestinian reporter Khalil Assali from the West Bank city of Ramallah. "The rest of the people saying we are voting for Fatah simply because Fatah was the leader of the Palestinian struggle during all these years and they should be in the coming years."
Public opinion polls indicate Palestinians hope a newly elected government will deliver some positive changes to make their lives better.
Israel and much of the outside world is watching closely. Israel, the United States, the European Union and many others consider Hamas a terrorist organization and there is concern about what the group's entry into a Palestinian government will mean for future peace efforts.