In March 2002 one of its bombers slaughtered 30 celebrants at a Passover dinner. Another blew up 21 Israeli teenagers at a disco in Tel Aviv.

It was not, however, responsible for yesterday’s suicide bombing in Tel Aviv, which injured 15 people and was claimed by Islamic Jihad. The group has been responsible for all six suicide bombings in Israel in the past year, and is the only faction to boycott next Wednesday’s election.

The green crescent moon of Hamas is rising high over the West Bank and Gaza as the deadliest Palestinian militant group follows the path of Hezbollah, Sinn Fein — and some of Israel’s founding fathers — from the bomb to the ballot.

Having shorn extremist rhetoric from its manifesto, the Islamic Resistance Movement will for the first time compete in the elections for the Palestinian Legislative Council.

Under the label Change and Reform it is poised to inflict serious electoral damage on the dominant Fatah movement of the late Yassir Arafat and Mahmoud Abbas, capitalising on discontent with Fatah’s corruption, inefficiency and inability to curb its own armed gangs. One poll showed the two parties neck and neck in Gaza, with Hamas on 31 per cent, just four points behind Fatah.

“We have our electoral programme on politics, agriculture, health, education and so on,” says Sheikh Mohammed Abu Teir, No 2 on the Islamists’ list. “In all these areas we have efficient and credible people to carry out their tasks.”

Newly released from a night in the cells for defying an Israeli ban on campaigning in the divided city, the red-bearded sheikh sits beside a model of the Dome of the Rock, in Jerusalem, made by his fellow prisoners during his 25 years in Israeli jails, most as a member of Hamas’s military wing.

“Even with modest means we have succeeded in gaining the trust of the people. We will fight the corrupt and serve the Palestinian people.”

It is a drastic transformation. The manifesto makes no mention of Hamas’s ultimate goal of eradicating Israel, instead speaking of “resistance to the occupation” and “balanced” relations with the West.

Meanwhile on-message spokesmen insist that while the movement retains its claim to all of historic Palestine, it remains committed to Sheikh Ahmed Yassin’s offer of a long-term compromise based on a Palestinian state in the West Bank and Gaza.

But even as it tones down the rhetoric, it has repeatedly refused to lay down its weapons. “The emphasis was on resistance as a main tool. Now we are more interested in political participation without making any concessions on our principles,” said Sami Abu Zohri, a spokesman in Gaza.

Sheikh Abu Teir is more direct, dismissing all talk of negotiations with Israel. “I have experienced 25 years in jail because of my steadfastness to my beliefs and principles. As I told Israeli Intelligence, I believe in fighting them until the Day of Judgment.”

Fatah, faced with its first serious electoral challenge, is rattled. Its leaders brand Hamas opportunist fanatics and urge all their supporters to vote.

“We pledge that the mistakes of the past will not be repeated,” said Mohammed Dahlan, a contender for the post- Abbas leadership, at a rally in Ramallah. “Let us be clear, if anyone thinks that he can vent his anger upon Fatah by making them lose, he is making a mistake.

“You will not be able to practise what you are experiencing today. It will be the policy of mouth-shutting, those who take religion at the expense of freedom of speech.”

Against the slickness of Hamas much of the Fatah campaign seems tired and complacent. Inside its gleaming Ramallah headquarters elderly Fatahniks duck responsibility for lawlessness today and mumble platitudes about Fatah’s revolutionary credentials in the 1960s. In the foyer are 28 posters of Arafat, but just two of its current leader, Mr Abbas.

Hamas too has a dead man on the campaign trail. Posters of the assassinated Sheikh Yassin are everywhere. Tellingly, while other parties’ icons are bedraggled by rain, the sheikh smiles behind the protective plastic that only the Islamists had the foresight to provide.

Not everyone is impressed. While Hamas is strong in Gaza many worry that its triumph will diminish chances of peace with Israel. Others voice alarm that the international community will cut off aid. Thousands of Palestinian Authority soldiers will stay loyal to Fatah, fearing loss of cosy sinecures.

Israel is also alarmed. Ehud Olmert, the acting Prime Minister, insisted that Hamas’s military and political wings were one and the same, while Tzipi Livni, the Israeli Foreign Minister, voiced his dismay. “Can you imagine any European country or the United States allowing a terrorist organisation to take part in elections?”

Others believe that the infusion of new blood is healthy after decades of Fatah hegemony. “People need to be ready for a new political reality,” said Ziad Abu Amr, a Gaza-based independent who has acted as an intermediary between Mr Abbas and Hamas.

“We are talking about a new political tradition emerging that is based on pluralism and genuine rotation of power. Once Hamas and other groups enter the system it will no longer be (Fatah’s) monopoly. New ground rules will be set.”

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